The BOLL indicator is a very simple and practical technical analysis indicator designed by the US currency analyst John Brin based on the standard deviation principle in statistics. Generally speaking, the movement of exchange rate always changes around a certain value center (such as moving average, cost line, etc.) within a certain range. The Bollinger Bands indicator is based on the above conditions and introduces the “exchange channel”. The concept is that the width of the exchange rate channel changes with the fluctuation of the exchange rate, and the exchange rate channel has variability. It will automatically adjust with the change of the exchange rate. Because of its flexible, intuitive and trendy characteristics, the BOLL indicator has gradually become a popular indicator in the market widely used by investors. Among the many technical analysis indicators, the BOLL indicator belongs to a special type of indicator. Most technical analysis indicators are constructed by quantitative methods. They do not rely on trend analysis and pattern analysis, but BOLL indicators are inextricably linked to the exchange rate pattern and trend. The concept of “exchange channel” in the BOLL indicator is the intuitive expression of the exchange rate trend theory.
BOLL uses the “exchange rate channel” to display various price levels of the exchange rate. When the exchange rate fluctuation is very small and is in consolidation, the exchange rate channel will narrow, which may indicate that the fluctuation of the exchange rate is in a temporary calm period; when the exchange rate fluctuation exceeds the narrow When the exchange rate channel is on the upper track, it indicates that the abnormally intense upward fluctuation of the exchange rate is about to start; when the exchange rate fluctuation exceeds the lower track of the narrow exchange rate channel, it also indicates that the abnormally intense downward fluctuation of the exchange rate will begin. Investors often encounter the two most common trading traps. One is to buy a low trap. After investors buy at the so-called low level, the exchange rate does not stop but falls continuously; the other is to sell a high trap. After selling points, the exchange rate rose all the way. The Bollinger Line uses Einstein’s theory of relativity in particular, and believes that all types of markets are interactive, and that various changes within and between markets are relative, and there is no absoluteness. The exchange rate is relative. , The exchange rate is above the upper rail line or below the lower rail line only reflects that the exchange rate is relatively high or low, investors must make a comprehensive reference to other technical indicators, including price-volume coordination, psychological indicators, analog indicators before making investment judgments , Related data between markets, etc.
In short, the exchange rate channel in the BOLL indicator plays an important reference role in predicting the future market trend, and it is also a unique analysis method for the wiring indicator.