What are the bollinger bands? In this article we will explain what the Bollinger Bands are a forex indicator which can be used to improve the possibility to be profitable in the trading activity.
Let’s explain now what they are and how to use them properly.
What are the Bollinger Bands
The Bollinger Bands are one of the most used indicator in forex trading. More than half of the traders in the world use them for their trading activity.
As you can see from the picture above there are 3 different lines:
- Uppen band
- Middle band
- Lower band
The upper band
The uppen band delimitates the chart on the top part. this means that when the graphic goes above the upper band, in the matter of short time it should return under it.
The middle band
The middle band represents the average trend of the chart. It helps to understand how generally the price is moving and try to predict how it should move in the future.
The lower band
The lower band works like the upper one, but in this case it delimitates the chart on the lower side. If the price will go below it, it’s then suppose to return above it in the short term.
How to use the Bollinger Band
The Bollinger bands are use by traders who love to invest in a lot and very fast positions. This means that the time consuming of this strategy is very high.
It also has an high risk but on the other side, if it’s well done, it could be very profitable.