The application skills of long and short bollinger bands can help investors to better grasp the trend and rhythm of the market and contribute to scientific and accurate decision-making. Below, I will introduce the use skills of the bollinger Band in detail, hoping to help investors.
We need to understand the basic principle of how empty the bollinger band is. The multi-empty bollinger band consists of three lines: upper rail, middle rail and lower rail. The middle track is the moving average of the stock price, which is usually calculated in a period of 20 days. The upper rail and the lower rail are formed by the distance of two standard deviations from the middle rail. When the stock price hits the upper track, it means that the market is overbought and may fall; When the stock price contacts the lower rail, it means that the market is oversold and may rebound. This method of judging how long and short the bollinger band is is relatively simple and intuitive, but we should pay attention to the market trend and special circumstances.
Pay attention to the relationship between the short and long of the bollinger Band and the stock price. When the stock price breaks through the upper track, it shows that the bulls are strong and the market is on the rise. Investors can consider buying stocks. When the stock price breaks through the downward track, it shows that the short-selling power is strong and the market is in a downward trend. Investors can consider selling stocks. But this does not mean buying or selling blindly, but judging by combining other indicators and the overall trend of the market.
Pay attention to the long and short deviation of the bollinger band. Deviation phenomenon refers to the deviation between the long and short bollinger bands and the stock price trend, that is, the stock price hit a new high or a new low, while the long and short bollinger bands have no corresponding trend. At this point, investors can be alert to the inflection point of the market, adjust their positions in time or adopt other strategies. Deviation can be used as an auxiliary indicator to judge whether the bollinger band is long or short, but attention should be paid to the overall market trend and the verification of other technical indicators.
We also need to understand the limitations of long and short bollinger bands. The bollinger band is only an auxiliary judgment tool and cannot be used as the basis for investment decision alone. Investors should also combine other technical indicators, fundamental analysis and market sentiment to form a comprehensive investment decision. The long and short bollinger bands cannot fully predict the future trend of the market, but can only provide reference and auxiliary opinions.
As a technical index, the bollinger band has certain reference value and application skills. When using the long and short bollinger Band, investors should understand its basic principles and judgment methods, pay attention to the relationship with the stock price and the deviation phenomenon, and combine other indicators and market conditions to form a comprehensive investment decision. Only on the basis of scientific accuracy can we better grasp the trend and rhythm of the market and improve the success rate of investment. I hope this article is helpful to investors, and I wish you all a smooth investment and a rich return!