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The Bollinger Bands® Indicator

List of Market Conditions for Using Bollinger Bands

Bollinger Bands are used as a technical indicator, that help retail traders read stock charts more easily. The Bollinger Bands indicator is a Channel Indicator. Channel indicators are lines that are drawn by the computer software program, above and below the price on the chart. The difference between Bollinger Bands and other channel indicators, is that Bollinger Bands expand and contract with the dimensions of the candlesticks or bar chart price. 

Often times, a beginner who is just learning how to read charts has a difficult time seeing sideways price action, and when a compression pattern is forming. Compressions are important technical patterns to recognize early, because these tight price patterns end with a sudden velocity or momentum run up or down. By using the Bollinger Bands indicator which consists of a line above and below the candlesticks on the price chart, compression patterns are easier to see so that a retail trader can prepare in advance for the breakout move...Read the full article here: http://goo.gl/EdchMJ
 

Trade Wisely,

Martha Stokes CMT 
Chartered Market Technician
Instructor & Developer of TechniTrader Stock & Option Courses

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