In the process of foreign exchange investment, investors will certainly use a variety of investment tools to assist individuals in making decisions. The Bollinger Bands indicator has been mentioned a lot in the recent exchanges among industry professionals. For those who have just entered the industry or with little experience, this stock analysis tool will be unfamiliar to this stock analysis tool. So what does the Bollinger Bands indicator mean? What is the calculation method for?
Bollinger Bands indicator
What is the Bollinger Band indicator?
The English abbreviation of the Bollinger Bands indicator is BOLL. People need to remember the English name in the industry and avoid the English name that does not know what it means. You must know that the English abbreviation appears in the stock investment process. If you don’t know the meaning, The operation process will be very difficult and the steps are cumbersome. The naming of the Bollinger Bands indicator is determined by the founder’s name, and the contributions made by the founder can be kept in mind. It is a value calculated using the principle of standard deviation. In the basic range, the concept of stock price channel is introduced, which is based on the stock price. Make reasonable adjustments when changes occur. The content displayed by the BOLL indicator is flexible and intuitive. With basic foreign exchange knowledge, the displayed content can be understood, and the extent of stock price fluctuations can be judged by the width of the stock price channel, and then the reasonable introduction and sale of personal investment stocks. The disadvantage that investors are easy to fall into in the operation is the phenomenon of buying low and selling high. However, after using the Bollinger Bands indicator, this phenomenon can be successfully avoided, reducing investment risks, and using relativity.
What is the calculation method of the Bollinger Bands indicator?
Among the foreign exchange investment indicators, the calculation method of the Bollinger Bands indicator is the most troublesome, which is also the key reason for the decrease in the later period of people’s usage, but its accuracy can still attract the vast majority of investors. Those who will give up use it because they are unskilled, do not have enough professional knowledge, and do not know how to calculate. The calculation method of the Bollinger Bands indicator is calculated according to the cycle, which can be divided into daily, weekly, monthly and annual index types. If you want to refine or divide it, the daily Bollinger Bands indicator and the weekly Bollinger Band indicators are often used. . The daily BOLL calculation method first needs to calculate the upper rail line (UP), the middle rail line (MB), the lower rail line (DN) and the price line. The price line is represented by the US line. The calculation method of the upper trajectory, the middle trajectory and the lower trajectory is calculated according to the relationship between the three. For example, the upper trajectory is equal to the middle trajectory plus 2 times the standard deviation.
How to look at the super short foreign exchange Bollinger Bands
- Bollinger Band Level
The upper, middle and lower rails of the Bollinger Bands are almost horizontal and out of the shape of an equal sign. This is the easiest sideways market we can judge. At this time, combined with the reversal signal, buy at high and buy at low, the winning rate is extremely high.
- Bollinger line opening
The opening of the Bollinger Band means that the upper and lower rails of the Bollinger Band are trumpet-shaped and have a horoscope shape. At this time, the exchange rate fluctuates violently, and it is easy to break through and form a unilateral market, which is suitable for trend trading. Friends who like to trade against the trend, must resist the temptation at the opening position of the Bollinger Band and give up the signal that they should not be taken.
- Bollinger necking
The Bollinger Band is narrowed, similar to an inner horoscope, and the horn is narrowed. At this time, the long and short forces of the exchange rate are evenly matched. It is temporarily impossible to clearly determine the market trend. At this time, the bar is often short and dense, and the trend is irregular, which is safe. For the sake of it, investors are not recommended to enter the market.
- Bollinger Bands are parallel upward or downward
When the upper and lower tracks of the Bollinger Bands are almost parallel upwards or downwards, it indicates that they are in a unilateral market with a longer duration. At this time, the trend is obvious, and it is not appropriate to reverse the trend. If you insist on reversal trading, you can do a homeopathic reversal, combining the Bollinger mid-rail or 14-day moving average and trend channel to do a homeopathic reversal of the secondary wave callback.
Bollinger Band Practical Skills
The actual skills of the Bollinger Bands mainly focus on the relationship between the foreign exchange K-line and the upper, middle and lower rails of the BOLL indicator, and the opening and closing conditions of the Bollinger Bands.
Buy and sell signals:
- When the price K-line breaks through the upper rail of the Bollinger Band and the TRIX indicator has issued the bottom “Golden Cross”, it indicates that the price is about to enter a mid- to long-term upward trend, and investors should be actively bullish at this time.
- After the Bollinger Band’s orbit has moved horizontally in a narrow range for a long time, once the price K-line belt volume breaks through the upper Bollinger Band and at the same time the originally narrow Bollinger Band channel suddenly opens up, it indicates that the price It is about to leave the original horizontal operating channel and enter a new ascending channel, which is also a buy signal issued by the BOLL indicator.
- When the price K line breaks through the middle rail of the Bollinger Band, and the TRIX indicator has issued a high “die cross”, it indicates that the asset price is about to enter a downward trend, which is a sell signal issued by the BOLL indicator. At this time, investors should be actively bearish.
- After the Bollinger Band’s orbit has moved horizontally at a high and narrow range for a long time, once the price K-line breaks through the lower Bollinger Band, and the originally narrow Bollinger Band suddenly opens downward, it means that the price is about to Departing from the original horizontal operating channel and entering a new descending channel is also a sell signal issued by the BOLL indicator.
In order to facilitate novices to grasp the indicators, the first financial teacher summarized the three major processes of learning indicators. The first step is to familiarize yourself with the indicator form and connotation, the second step is to deepen your understanding of actual combat, and the third step is to summarize, analyze, and understand. The use of indicators is not a problem.
The above content is related to the introduction of the Bollinger Bands indicator. Investors use it less frequently. Once used, it will be inseparable from the benefits it brings. It can easily distinguish investment trends. It is a stock analysis tool. It is said that it is a magic weapon in the stock industry. After using it, many investors will find that trading is smoother. Every crisis can make reasonable predictions with the help of the Bollinger Bands indicator.