The bollinger band consists of three lines, usually a 20-balanced moving average in the middle, with upward and downward movements respectively. The algorithm is to calculate the standard deviation of the closing price in the past 20 days, usually multiplied by 2 to get 2 times the standard deviation. Up is 20 EMA plus 2 standard deviation, down is 20 EMA minus 2 standard deviation.

Midline = 20-day moving average

Online = 20-day moving average+2sd (closing price on the 20th)

Downline =20-day moving average -2sd (20-day closing price)

Bollinger Band is a very practical technical index designed according to the standard deviation principle in statistics. It consists of three track lines, of which the upper and lower lines can be regarded as the pressure line and the support line of the price respectively, and there is an average price line between the two lines. Generally, the price line runs in a belt-shaped interval composed of upper and lower tracks, and the position of the track is automatically adjusted with the change of price. When the band narrows, there may be fierce price fluctuations immediately; If the high and low points cross the band boundary line and immediately return to the band, there will be a gear back.

Bollinger Bands have four main functions:

1. bollinger bands can indicate support and pressure positions;

2. The bollinger Band can show overbought and oversold;

3. Bollinger bands can indicate trends;

4. Bollinger Bands have channel function.

The actual effect will be better if the bollinger band is used comprehensively with static indicators. Bollinger bands are generally shown as three lines. If the switch parameter is set to 1, the graph will be displayed as four lines. The outermost two are the support line (downward line) and the resistance line (upward line) of this trend. The width of the band shows the range of price changes. The wider the width, the greater the price change. The theoretical application principle of static indicator Bollinger Band is that when the price crosses the outermost pressure line (support line), it means that the selling point (buying point) appears. When the price moves up (down) along the pressure line (support line), although the price does not cross, if it breaks through the second line, it is a selling point or a buying point.

Main trading rules:

1. When the price crosses the downward line from bottom to top or the upward line from top to bottom, it can be regarded as an inversion signal.

2. When the price crosses the midline from bottom to top, the price will accelerate, which is a signal to increase the position and buy.

3. When the price fluctuates between the middle line and the upward line, it is a bull market, and you can wait and see more positions.

4. After the price runs between the middle line and the upward line for a long time, the selling signal is that the price falls below the middle line from top to bottom.

5. When the price fluctuates downward between the midline and the downtrend, it is a short market. At this time, investors should wait and see with money.

6. When the bollinger band closes, it is likely that the market will break out.