The upper and lower are two standard deviations below and above the moving average in the middle. The middle band consists of a 20 period moving average. The spacing between the lower, upper, and middle band is determined by volatility. Selling when the price touches the upper band and buying when the price touches the lower band. They are mainly used when determining when there are overbought or oversold levels. The middle band basically serves as a base for both the upper and lower. Bollinger Bands include three different lines. So in theory, the prices are high at the upper band and then are low at the lower band. The purpose of these bands is to give you a relative definition of high and low. They were created by John Bollinger in the early 1980s. You can get a great Bollinger band formula with a simple trading strategy. How To Use Bollinger Band Indicatorīollinger Bands are well known in the trading community. 17 What is the Best Bollinger Bands Strategy? Tap here now to get it.
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