Theory
Bollinger Bands are a staple in many traders' toolkits, and for good reason. Essentially, this indicator helps us spot when the closing price breaks above the upper Bollinger Band or dips below the lower one. Many traders interpret these breakouts differently—some see them as reversal signals, while others view them as confirmation of a trend. If you’re leaning towards using them for reversals, consider setting your band deviations slightly higher than what you would for trend-following strategies.
Usage
One effective way to utilize Bollinger Bands is by using arrow signals, which can make your trading decisions clearer.
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