Bollinger Bands.

All work on Forex is built on the basis of just a few fundamental tactics, one of which is Bollinger Bands.

Bollinger Bands are a tool for technical analysis of the currency or stock market. They allow you to assess how the current situation differs from historical data.

Externally, this graphical construction consists of two lines, one of which is above the moving average (the upper price boundary), and the other below (the lower price boundary). This creates a dynamic price channel whose width is constantly changing. In

other words, the Bollinger Bands characterize the volatility of the forex market over a specific time period, which serves as the starting point for the calculations. The resulting data allows one to evaluate the price level relative to previous periods.

Bollinger Bands have long been constructed using the technical indicator of the same name, which can be found in almost any trader's terminal. Its operation is based on the principle that 95% of price fluctuations should fall within the formed channel.

When you launch it, you can easily configure all the necessary parameters, and the Bollinger Bands are plotted automatically.

A trading strategy using these bands is very similar to trading in a regular price channel.

Buy trades are opened when the price bounces off the lower band and moves upward.

Sell trades are opened under the opposite conditions, when the price bounces off the resistance line and begins to move downward.

Since the Bollinger Band width is constantly changing, a breakout strategy is practically ineffective, as the breakout itself is not visible on the currency pair chart, only the channel's expansion.

To avoid problems, it is advisable to enter into trades in the direction of the main trend, ignoring corrective price movements.

Overall, Bollinger Bands are a fairly effective technical analysis tool that can be used both for finding market entry signals and simply for assessing current volatility.

For more information on using this trading tactic, read the following articles on this website.