Basic application: under normal circumstances, the stock price will run in the BOLL channel interval, and the strong pressure level when the stock price runs near the upper rail can generally be used as a selling point; The stock price running near the lower rail is a strong support level, which can generally be used as a buying point.
Essence:
1. Using statistical principles, the standard deviation of stock price and its confidence interval are obtained, so as to determine the fluctuation range and future trend of stock price.
2. Use bands to display the safe highest and lowest prices of stock prices.
3. It consists of upper, middle and lower tracks. The middle rail represents the main trend of the market and plays the role of support and pressure.
The normal range is usually that the stock price runs in a certain width band, which shows that the stock price is in a relatively balanced state and there will be no extreme ups and downs. At this time, the use of bollinger bands is very simple.
1, the selling point signal when the stock price crosses the upper pressure line (dynamic upper pressure line, static upper pressure line BOLB 1);
2. When the stock price crosses the lower support line (dynamic lower support line, static lowest support line BOLB4), buy some signals;
3. When the stock price crosses the middle boundary from bottom to top (from BOLB4 to BOLB3 statically), it is an overweight signal;
4. When the stock price crosses the midline from top to bottom (BOLB 1 statically crosses BOLB2), it is a selling signal.
Extended data:
The technical indicator Bollinger Band is usually used as an auxiliary indicator to judge the stock price trend, that is, the position of the stock price in the Bollinger Band is used to evaluate the strength of the stock trend. When the price line is above the middle of the bollinger band, it is mostly a bull market, which can hold shares or buy, while when the price line is below the middle of the bollinger band, it is mostly a short market, so we should intervene cautiously. The bollinger bands are up and down, indicating strength.
When the upper rail of the bollinger band runs downward, while the middle rail and the lower rail are still running upward, it shows that the stock price is in a consolidation trend. If the stock price is in a long-term upward trend, it shows that the stock price is a strong consolidation on the way up, and you can choose to intervene on dips. If the stock price is in a long-term downward trend, it shows that the stock price is a weak consolidation on the way down, mainly by waiting and seeing to lighten up.
The horizontal movement after a long-term decline shows that the stock price is in the bottoming stage and can be opened in batches. Once the three lines start to diverge, you can add positions to buy.
When the stock price rises slightly in the early stage, it means that the finishing market with the stock price in the rising stage can be overweight.
When the stock price runs to a high level and shows a slight decline, it means that it is in the stage of sideways consolidation of the falling market, mainly by lightening positions. Once there is a deviation, we will resolutely sell it.
When the stock price is sideways, the bollinger band will also be sideways, which can be divided into three types: sideways rising, sideways falling and sideways. There are more opportunities for horizontal sideways to appear at the bottom of large scale.
References:
Baidu encyclopedia-bollinger band