The bollinger band index consists of three lines: middle track, upper track and lower track. The middle track is calculated according to the moving average over a period of time, usually a 20-day moving average. The upper rail line and the lower rail line are the distance of the next standard deviation on the middle rail line, and the standard deviation is an index used to measure the price fluctuation.
The principle of the bollinger band indicator is that when the price tends to go up, it is considered that the market is overbought and the price may fall. When the price tends to fall, the market is considered oversold and the price may rise. Investors can make buying and selling strategies according to the signal of Bollinger Band.
When using the bollinger band indicator, you need to pay attention to some details. The bollinger band indicator is not omnipotent, it is only an auxiliary tool and cannot be used in isolation. Investors should combine other technical analysis indicators and fundamental analysis to make decisions.
The validity of the bollinger band index is also affected by the market environment. When the market trend is obvious, the effect of bollinger band indicator is better, while in the volatile city, the signal of bollinger band indicator may be more misleading because of the small price fluctuation.
The bollinger band index also needs to be adjusted according to different investment varieties and time periods. Different securities and markets may have different volatility, so investors need to personalize the indicators according to the actual situation.
For investors who are not familiar with technical analysis, it may take some time and experience to learn and use the bollinger Band. Before using the bollinger band index to make investment decisions, investors should fully study and practice to improve their judgment and decision-making ability on the market.
The Bollinger Band indicator is a useful technical analysis tool, which can help investors to analyze the fluctuation of securities prices. It is not a panacea, and it needs to be used together with other analysis methods, and it needs to be adjusted individually according to the actual situation. Only on the basis of full understanding and mastery can we make effective use of the bollinger band index to make investment decisions.