We play off Bollinger Bands, divergences, reversal candles in the context of a range day.
Really looking not so much at Bollinger Bands or any kind of indicator like the stochastic or RSI.
Some internet postings claim that Starc bands are similar to Bollinger bands, but this is not the case.
Over the years, I have found Bollinger bands to be very helpful in identifying periods of low volatility.
The 30-day lower Bollinger bands are negatively aligned and point south, indicative of the overall direction for spot.
On May 3, SLV closed above the Bollinger bands, and then two days later, closed below them (point 1).
Just six days later, SLV again closed above the Bollinger bands, point 2, as SLV made new highs for the year.
For over 20 years, I have used two primary technical tools to measure both volatility and risk: Bollinger bands and Starc bands.
Band width finally broke out to the upside on September 7 after SLV had closed for three consecutive days above the Bollinger bands.
The blue lines on the chart above represent the Bollinger bands, and below the bar chart, I have plotted the band width indicator.
Bollinger bands, were developed by John Bollinger and generally are calculated by plotting two standard deviations above and two standard deviations below a 20-period moving average.
Constricting bollinger bands indicate the potential for an increase in volatility that could trigger a breakout, and the proximity to the upper band suggests an overbought position.
Simply watching the VIX has failed traders in recent years, and technical tools like Bollinger bands and Starc bands have proven to be more effective measures of volatility and risk.
Bollinger bands are used by traders in many different ways, and John Bollinger himself has his own set of rules and guidelines, which can be found on his Web site, BollingerBands.com.
"With ETFs the individual investor has tools and techniques that were solely the province of sophisticated investors even a year ago, " says John Bollinger of Bollinger Capital Management, whose Bollinger Bands are a popular method for identifying stocks that have moved outside their normal trading pattern.
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