1. Bollinger Band is composed of three lines. The one in the middle is usually the 20-day moving average, and the two lines above and below are the Up line and Down line respectively. The algorithm is first Calculate the standard deviation of the closing prices of the past 20 days

Bollinger Band

2. Standard deviation SD (Standard Deviation), usually multiplied by 2 to get 2 times the standard deviation, Up line It is the 20-day moving average plus 2 times the standard deviation, and the Down line is the 20-day moving average minus 2 times the standard deviation.

3. Under normal circumstances, the price will fluctuate up and down within the Bollinger Channel. Therefore, when investors cannot judge the direction of market fluctuations, there will be several fluctuations at the bottom of the channel and at the top of the channel. When the price rises to the top of the Bollinger Channel, it will encounter greater resistance. On the contrary, when the exchange rate fluctuates to the bottom of the channel, it will receive great support.

4. When the bandwidth of Bollinger Bands is very narrow, it is a signal that the market is about to choose a breakthrough direction. Be careful when using this method, because the price will often have false breakthroughs at this time, and investors should wait until the direction of the breakthrough is clear and the bandwidth of the Bollinger Bands is enlarged before intervening.