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Forex Bollinger Bands Indicator Tutorial

In this post, I am going to share with you how I use the forex bollinger bands indicator in my trading so that you can also use it the same way as me to enhance your trading strategy. So What Is Bollinger Bands? It is an indicator that is made up of an upper band […]

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    In this post, I am going to share with you how I use the forex bollinger bands indicator in my trading so that you can also use it the same way as me to enhance your trading strategy.

    So What Is Bollinger Bands?

    It is an indicator that is made up of an upper band and a lower band. It looks like tunnel for the price to move in when you plot it on your chart.

    So How To Use This Indicator?

    There are several ways you can make use of this indicator in your trading.

    1) Support and Resistance

    If you take a look at the upper and lower bands, you will find that the price usually get repelled by them. The upper band serves as a resistance level and the lower band serves as a support level.

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    Therefore if you are looking for a point to enter your trade, these 2 bands can be a great area to consider.

    2) Breakout

    If you are a fan of using the breakout strategy, the forex bollinger bands is one indicator that you must have in your trading plan.

    When you see that the bands are pretty narrow (squeeze the bands), it is a sign that the market is currently in consolidation.

    squeeze the bands

    When you see that the bands are side apart, it is a sign that the market is currently in the breakout phase. If you are a breakout trader, you will be waiting for the breakout to occur and then enter a trade in the direction of the breakout.

    3) Tell The Trend

    Another way to use the Bollinger Bands is to tell the trend of the market. This can be done by observing the slope of this indicator.

    When the bands are sloping upwards with candles sticking to the upper bands, it is a sign of strong up trend.

    When the bands are sloping downwards with candles sticking to the lower bands, it is a sign of strong down trend.

    Down trend

    The above are 3 great ways you can use this forex bollinger bands indicator. I hope that you find this information useful for you and do feel free to give your comment below as it will be very helpful to other traders here in this website.

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