Average stock price. Usually it’s 50 day average pitted against the 200 day average. If the 50 goes below the 200 it’s a sell and if it goes above the 200 it’s a buy.
Developed by John Bollinger, Bollinger Bands are an indicator that allows users to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security’s price action.
A simple moving average in the middle
An upper band (SMA plus 2 standard deviations)
A lower band (SMA minus 2 standard deviations)
Standard deviation is a statistical term that provides a good indication of volatility. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility. Sharp price increases (or decreases), and hence volatility, will lead to a widening of the bands.
For more click the link:
Check out the Chart School at
for more on chart reading and technical indicators.
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Average stock price. Usually it’s 50 day average pitted against the 200 day average. If the 50 goes below the 200 it’s a sell and if it goes above the 200 it’s a buy.
Developed by John Bollinger, Bollinger Bands are an indicator that allows users to compare volatility and relative price levels over a period time. The indicator consists of three bands designed to encompass the majority of a security’s price action.
A simple moving average in the middle
An upper band (SMA plus 2 standard deviations)
A lower band (SMA minus 2 standard deviations)
Standard deviation is a statistical term that provides a good indication of volatility. Using the standard deviation ensures that the bands will react quickly to price movements and reflect periods of high and low volatility. Sharp price increases (or decreases), and hence volatility, will lead to a widening of the bands.
For more click the link:
Check out the Chart School at
for more on chart reading and technical indicators.