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Best bollinger bands strategy for binary options

A complete explanation of Bollinger Bands

Scalping Bollinger Bands Strategy is best for quick profits

Bollinger bands help assess how strongly an asset is rising ( uptrend ), and when the asset is potentially losing strength or reversing.

Chart 1 shows Apple (AAPL) within a strong uptrend. Notice how %B moved above 1 several times, but did not even come close to 0. Even though %B moved above 1 numerous times, these “overbought” readings did not produce good sell signals. Pullbacks were shallow as Apple reversed well above the lower band and resumed its uptrend. John Bollinger refers to “walking the band” during strong trends. In a strong uptrend, prices can walk up the upper band and rarely touch the lower band. Conversely, prices can walk down the lower band and rarely touch the upper band in a strong downtrend.

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A band plotted two standard deviations away from a simple moving average, developed by famous technical trader John Bollinger . In this example of Bollinger ...

Under such a condition, overbought or oversold, there is the highest chance of forming the reversal signals. Weak reversal signals usually take the price to the middle band again, and then the price follows the same course again. Therefore, strong continuation signals form close to the middle band when the market is trending.

The next image shows the Bollinger Bands overlaid on a price chart with green and red arrows. This is a trade example taken from strategy number two, which you can read about below.

“So what are Bollinger Bands? They are curves drawn in and around the price structure usually consisting of a moving average (the middle band), an upper band, and a lower band that answer the question as to whether prices are high or low on a relative basis. Bollinger Bands work best when the middle band is chosen to reflect the intermediate-term trend, so that trend information is combined with relative price level data.”

There have been numerous tests and  statistical studies of the effectiveness of the application of Bollinger bands to trading financial instruments.
The bands are a measure of how far price is from a simple moving average. The upper and lower band are both set at 2 standard deviations away from that simple moving average.

Price moves in upper bands channel – uptrend, lower - downtrend

It is very simple to identify dominating price direction by simply answering the question: in what part of the Bollinger Bands the price is currently trading? If price stays above the middle line – in the upper channel – we’ve got a prevailing uptrend. If below the middle line – in the lower channel – we have a prevailing downtrend.

Rules for a Downtrend:
1. As long as the price continuously touches the Lower Bollinger band, the Impulsive wave (1, 3 or 5) is in progress.
2. If price retraces up approaching the upper band - the corrective wave is in progress.
3. Once the price touches the upper band - the corrective wave will most likely be over and a new wave should follow.

A stock may trade for long periods in a trend , albeit with some volatility from time to time. To better see the trend, traders use the moving average to filter the price action. This way, traders can gather important information about how the market is trading. For example, after a sharp rise or fall in the trend, the market may consolidate , trading in a narrow fashion and criss-crossing above and below the moving average. To better monitor this behavior, traders use the price channels, which encompass the trading activity around the trend.

Overbought:  Look for reversal trades short or this can be the first part of a setup for another long trade.  Overbought is a bullish condition.

Forex Bollinger Bands Momentum ADX Technical Analysis Trading. Technical analysis is a trading tool employed to evaluate securities and attempt to forecast their future movement by analyzing statistics gathered from trading activity, such as price movement and volume.