Make Money At Home | Stock Trading Buy and Sell Signal? Check out Bollinger Bands(95% Success Rate)!
Indicator introduction:
Boll index, also known as Bollinger Bands, is a very simple and practical technical analysis index designed by Technical Trader -John Bollinger according to the principle of standard deviation in statistics. Bollinger Bands is a medium and long term technical analysis tool to study and judge the stock price movement trends.
Generally speaking, the movement of stock price always revolves around a certain value center (such as moving average) within a certain range. Based on the above conditions, the Bollinger Bands index introduces the concept of “stock price channel”. It thinks that the width of the stock price channel varies with the fluctuation range of stock price, and the stock price channel has variability and automatically adjusts.
Key Points of Trading Operation:
- In the normal range, the technology and method used in Bollinger Bands
The normal range is usually that the stock price runs in a certain width band range, which is characterized by that the stock price does not rise or fall sharply, and is in a relatively balanced state. At this time, the method of using Bollinger Bands is very simple.
1). When the stock price crosses the upper limit pressure line, the selling signal;
2). When the stock price crosses the lower limit support wire , buy signal;
3). When the stock price crosses the middle limit from bottom to top, it is the signal of adding position;
4). When the stock price crosses the middle line from top to bottom, it is a sell signal.
2. The Significance of Necking
1). After several waves of decline, the stock price often turns to narrow range consolidation for a long time. At this time, we find that the upper and lower limits of the Bollinger Bands are very small, narrower and closer. The price difference between the highest price and the lowest price of the stock price is very small, and there is no profit margin in the short term, so it is often impossible to earn the service fee. Intraday trading is not active and trading volume is scarce. Investors should pay close attention to this kind of contraction, because a big round of market may be brewing. Once the volume increases, the share price rises, the opening of the Bollinger Bands expands, and the bull market is announced to begin.
2). If the opening of the Bollinger Bands is extremely small at the high level, once the stock price breaks down, the opening of the Bollinger Bands will enlarge, and a round of decline will be inevitable.
3. Significance of Opening
1). When the stock price rises from low to high after several waves, the opening of the top pressure line and the bottom support line of the Bollinger Bands reaches a maximum extent, and the opening can not continue to enlarge and turn into contraction, this is the selling signal. Generally, the stock price is followed by a round of sharp decline or adjustment of the market.
2). When the stock price falls sharply after several waves, the opening of the upper and lower limit of the brin line can not continue to enlarge. The pressure line of the upper limit of the brin line shrinks from top to bottom in advance. When the support line of the lower limit of the brin line subsequently shrinks from the bottom to the top, a downward trend will come to an end.
Download Ainvest App to learn more!
