Bollinger Band Trading

So you want to learn how to master Bollinger band trading. That's a smart move because Bollinger bands are probably the best indicator you can use to achieve near perfect entry and exit consistently.

In fact when your done reading this page, and when you have signed up for our free download about Bollinger band trading you will know more than most traders know about how to trade with Bollinger bands.

There are the beginning concepts about trading Bollinger bands and then there are the advanced topics. Combined you posses a tool for insight that you really cannot get from any other indicator.

Bollinger band trading requires that you understand all of these concepts completely in making trading decisions using the bands.

1.Bollinger band squeeze
2.Bolinger band continuation
3.Bollinger band reversal

What makes Bollinger bands even more unique are the advanced concepts that accompany these signals that form.

As you observe a continuation, a squeeze or a reversal pay special attention to how the upper and lower bands respond to approaching price action.

take a look at the following diagram closely and with careful study because grasping the following is the golden key to successful Bollinger band trading.

Bollinger band trading tactics for advanced traders

The candlesticks present represent current approaching price action to the upper or lower band. Lets start with #1.

1. Extremely bearish, price is falling to a lower band and the KEY is of course watching both the upper and lower band as price approaches. In this case the upper is rising while the lower is falling indicating not only a potential explosion in price but one to the downside is extremely likely.

2. Extremely bullish, price is rising to the upper band and the KEY is keeping a watchful eye on BOTH band as price approaches. In this case the upper band haeds UP and the lower band falls, indicating a potential price explosion to the upside.

3. Price approaches the lower band while the upper and lower band remain flat. This is very insignificant and should be ignored unless things change.

4. Price approaches the upper band while the upper and lower bands remain flat. This is also insignificant and best left for the amateurs to enter. 

5. Bearish candlestick at a lower band while band constrict - this is a sign that price is likely at least for now going nowhere. Wait do not enter.

6. Same here, a bullish candlestick at the upper band while the bands are constricting is a sign that not much is about to happen just yet.

7. Like #1 this is a sign that price is going to make a nice move but the lack of the upper band hooking up indicates that the move for now won't necessarily be explosive.

8. Also similar to its counterpart in that price will likely move but not to the explosive level that would be expedited if the lower band was hooking downward.  The lack of the lower band hooking down limits the potential move here.