1. The bollinger Band consists of three lines:
Middle Track (MA): It consists of the moving average of closing price in a period of time, usually 20 days or 2 1 moving average. The middle rail line is the baseline of the bollinger band and can be used to judge the mid-term trend of prices. Upper band: It consists of the middle rail plus twice the standard deviation, reflecting the price fluctuation. The upper rail line can be used as the pressure line for price increase. When the price exceeds the upper rail line, there may be a callback or adjustment. LowerBand: It is composed of the middle rail minus twice the standard deviation, which can be used as the support line for price decline. When the price falls below the lower rail line, there may be a rebound or reversal. 2. Judging the trend of Bollinger Bands By observing the trend of Bollinger Bands, you can judge the price trend of stocks or futures:
When the price breaks through the upper rail line, it indicates that the market is overbought and there may be opportunities for correction or adjustment. When the price falls below the lower rail line, it indicates that the market is oversold and there may be a chance of rebound or reversal. When the price fluctuates near the middle rail line, it shows that the market is in a state of shock, and the further trend of the price can be judged by observing other indicators and patterns. 3. Application skills of bollinger Bands There are many application skills of bollinger Bands:
When the price breaks through the upper rail line, you can consider lightening the position or establishing an empty position. When the price falls below the lower rail line, you can consider adding positions or establishing long positions. When the price fluctuates near the middle rail line, it can be judged by combining other technical indicators and forms, such as K-line shape and volume. The width of the bollinger band (the distance between the upper rail line and the lower rail line) can reflect the intensity of price fluctuation, and the narrowing of the width may mean that there will be big fluctuations in the market soon. To sum up, the Bollinger Band is a very commonly used technical analysis tool, which can help investors judge the price trend and fluctuation. However, it should be noted that the bollinger band is only an auxiliary tool and cannot judge the price trend. Investors should comprehensively consider technical indicators such as bollinger bands and fundamentals to make decisions.