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BOLL bollinger line

1. Introduction

Bollinger Bands are envelopes plotted at a standard deviation level above and below a simple moving average of the price. Because the distance of the bands is based on standard deviation, they adjust to volatility swings in the underlying price. Bollinger Bands use 2 parameters, Period and Standard Deviations, StdDev. The default values are 20 for period, and 2 for standard deviations, although you may customize the combinations. Bollinger bands help determine whether prices are high or low on a relative basis. They are used in pairs, both upper and lower bands and in conjunction with a moving average. Further, the pair of bands is not intended to be used on its own. Use the pair to confirm signals given with other indicators.


2. Calculation formula

Middle track = N-day moving average

Upper trajectory = middle trajectory + twice the standard deviation

Lower trajectory = middle trajectory - twice the standard deviation


3. Application

3.1 When the stock price crosses the upper limit pressure line, it can be regarded as a selling point signal

3.2 When the stock price crosses the lower limit support line, it can be regarded as a signal to buy

3.3 When the stock price crosses the middle line from bottom to top, this is an overweight signal, and it is considered that it may turn long

3.4 When the stock price crosses the middle line from top to bottom, it is a signal to sell and is deemed to be short


4. Features

4.1 When the K-line of the stock price breaks through the upper track of the Bollinger Band and the TRIX indicator has formeda bottom "golden cross", it means that the stock price is about to enter a mid tolong-term upward channel. This is a buy signal of BOLL indicator, at this time, investors should buy stocks in a timely manner.

4.2 After the Bollinger Band has moved in a narrow range at the bottom for a long period of time, once the K-line of the stock price breaks through the upper Bollinger Band and the originally narrow Bollinger Band suddenly opens up, it means that the stock price It is about to leave the original channel and to enter a new ascending channel, which is also a buying signal ofthe BOLL indicator.

4.3 When the K-line of the stock price breaks through the middle track of the Bollinger Band, and the TRIX indicator has formeda high "deathcross", it means that the stock price is about to enter a mid- to long-term decline channel, which is a sell signal of BOLL indicator signal. At this point, investors should liquidate their positions as soon as possible.

4.4 After the Bollinger Band orbit has moved in a high and narrow range for a long time, once the K-line of the stock price breaks through the lower track of the Bollinger Band, and at the same time the narrow Bollinger Band channel suddenly opens downward, it means that the stock price is about to leave from the original channel and entering a new downward channel which is also a sell signal of the BOLL indicator.

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