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The Bollinger Bands Indicators have been around for more than three decades, and they were named after the man that invented them, John Bollinger.
The Bollinger Bands is useful especially in the ever-changing trading market and can be used to identify extreme price movements that is ripped for reversal.
John Bollinger started to put together a scheme designed to help him invent a pair of revolutionary bands designed to both add and substract a standard deviation calculation.
This is precisely how the two trading bands emerged, and they are still widely used today both by professional and by amateur traders who are trying to define a relative high and low for the price of their securities.
Although their mechanism of action may seem simple (and judging by the way they work, it truly is), the Bollinger Bands can truly make a difference in the life of every trader by maximizing the gains and minimizing the losses.
In addition, the Bollinger Bands can be used to recognize patterns and to compare the price-per-indicator ratio.
Bollinger Bands Indicator works best when used together with another indicator (which we will cover in later videos) for more accurate signals of potential buy/sell opportunities.
The Bands can be used to generate signals (when combined with the price-action indicator), and the trader will also be informed in real-time whenever the prices pass the lower band (this is referred to as a “Double Bottom Buy” signal).
Since every action has a reaction, there is an equal and opposite signal to the Double Bottom Buy – the Double Top Sell signal, which is sent to the trader whenever the prices go over the upper band.
Bollinger Bands Indicator can be used across a variety of market conditions but best used to pin point extreme price movements that is ready for a massive reversal.
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