What are Bollinger Bands?

Bollinger Bands are indicators used to trade shares using technical analysis access. Technical analysis is an approach to investing in the market that is trying to use the disciplined market timing approach. Bollinger Bands was developed by John Bollinger at the age of 80.

Technical analysis approaches include computing techniques Movement diameters shares in interest. The sliding average is simply a diameter that is calculated for a period of time and repeats over time. A typical gliding average is a seven -day gliding average, calculated by adding stock price for the last seven business days and a result of the result by seven. A day later the average is calculated again, but the price from the first day is dropped and the price two becomes the price of the day. This is repeated every day until the replacement of the original day seven. This process is repeated every trade day and the results can be taken as an average price of shares versus time.

using the same data file from which the diameter is calculated can be calculatedAT Standard deviation for the same data set. The graph includes two more lines, the first showing the average plus one standard deviation and the second showing the average standard minus deviation. These two lines are called Bollinger Bands . The average plus one standard deviation is the upper Bollinger band and the average standard deviation minus one is the lower Bollinger band. There are now four lines in the graph: daily stock price, gliding average and upper and lower Bollinger tapes.

Technical traders use this information to determine business signals. If shares prices approach the upper Bollinger band, the stock is assumed that the shares are in a high price range. If the shares approach the lower Bollinger zone, then they are said to be in their lower business range. If the supplies should have broken outside one of the Bollinger Bands, then a significant step in the price of shares is expected. John Bollinger who accepts