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How to Use Bollinger Bands

Congratulations on making it to the 5th grade! Each time you make it to the next grade you continue to add more and more tools to your trader’s toolbox.

“What’s a trader’s toolbox?” you ask.


Let’s compare trading to building a house. You wouldn’t use a hammer on a screw, right? Nor would you use a buzz saw to drive in nails. There’s a proper tool for each situation.

Just like in trading, some trading tools and indicators are best used in particular environments or situations. So, the more tools you have, the better you can adapt to the ever-changing market environment.

Or if you want to focus on a few specific trading environments or tools, that’s cool too. It’s good to have a specialist when installing your electricity or plumbing in a house, just like it’s cool to be a Bollinger Band or Moving Average expert.

There are a million different ways to grab some pips!

For this lesson, as you learn about these indicators, think of each as a new tool that you can add to that toolbox of yours.

You might not necessarily use all of these tools, but it’s always nice to have plenty of options, right? You might even find one that you understand and comfortable enough to master on its own. Now, enough about tools already!

Let’s get started!

Bollinger Bands

Bollinger Bands, a chart indicator developed by John Bollinger, are used to measure a market’s volatility.

Basically, this little tool tells us whether the market is quiet or whether the market is LOUD! When the market is quiet, the bands contract and when the market is LOUD, the bands expand.

Notice on the chart below that when price is quiet, the bands are close together. When price moves up, the bands spread apart.

Bollinger Bands

That’s all there is to it. Yes, we could go on and bore you by going into the history of the Bollinger Band, how it is calculated, the mathematical formulas behind it, and so on and so forth, but we really didn’t feel like typing it all out.

In all honesty, you don’t need to know any of that junk. We think it’s more important that we show you some ways you can apply the Bollinger Bands to your trading.

Note: If you really want to learn about the calculations of a Bollinger Band, then you can go to

The Bollinger Bounce

One thing you should know about Bollinger Bands is that price tends to return to the middle of the bands. That is the whole idea behind the Bollinger bounce. By looking at the chart below, can you tell us where the price might go next?

Price reached the top of the Bollinger band

If you said down, then you are correct! As you can see, the price settled back down towards the middle area of the bands.

Price bounces back towards the middle of the Bollinger Bands

What you just saw was a classic Bollinger Bounce. The reason these bounces occur is because Bollinger bands act like dynamic support and resistance levels.

The longer the time frame you are in, the stronger these bands tend to be. Many traders have developed systems that thrive on these bounces and this strategy is best used when the market is ranging and there is no clear trend.

Now let’s look at a way to use Bollinger Bands when the market does trend.

Bollinger Squeeze

The Bollinger Squeeze is pretty self-explanatory. When the bands squeeze together, it usually means that a breakout is getting ready to happen.

If the candles start to break out above the top band, then the move will usually continue to go up. If the candles start to break out below the lower band, then price will usually continue to go down.

Bollinger Band squeeze

Looking at the chart above, you can see the bands squeezing together. The price has just started to break out of the top band. Based on this information, where do you think the price will go?

Bollinger Band Squeeze Expands

If you said up, you are correct again!

This is how a typical Bollinger Squeeze works.

This strategy is designed for you to catch a move as early as possible. Setups like these don’t occur every day, but you can probably spot them a few times a week if you are looking at a 15-minute chart.

There are many other things you can do with Bollinger Bands, but these are the 2 most common strategies associated with them. It’s time to put this in your trader’s toolbox before we move on to the next indicator.


        祝贺你来到了第五级的课程! 每当你进入下一级,你就会为你的交易工具箱继续添加越来越多的工具。

      “什么是交易者的工具箱啊?” 你问。


       就好比盖房子吧, 你不会用锤子来扭紧一颗螺丝, 也不会看到你用锯子来推动钉子,对不对? 所以说对于不同的情况,都要有一个适当的工具。

       就像在交易中,一些工具和指标,只在特定的环境或情况变化之中,才能发挥最好的运用。 所以,你拥有的工具越多,你就可以更好的去适应,不断变化的市场趋势。




       你不一定要使用所有工具,但拥有多种选择永远是最好的,对吗? 但你只需要找到一个能了解和使用舒适的,自己努力把它掌握熟悉。现在,工具说得够多啦!




       基本上,这个小工具可以告诉我们,市场是安静还是热闹的。当市场安静时,布林带缩小,当市场热闹时 ,布林带就扩大了。

       注意在下面的图表中,当价格趋于平稳时,布林线是越缩越小的。 当价格上升时,布林线就分开了。

       就是这么简单。 是的,我们继续学习下去,并进入到布林带的历史,看它是如何计算的,以及它背后的数学公式,等等。但我们真的不喜欢把所有的东西都写出来。

      老实说,你是不需要知道这些垃圾信息的。 我们认为更重要的是一些,可以适用于交易的布林带用法。



       有一件事你应该知道,那就是价格会习惯的回落到布林带的中间。 这是布林线回落的整个概念。 通过对下面图表的察看,你能告诉我们价格可能会走向哪里吗?

       如果你说往下走,那么你是正确的! 正如你看到的,价格回落到布林线的中间地带。

       你刚才看到的是一个典型的布林线回落模式。 出现回落的原因,是因为这些布林线的位置,充当了动态的支持和阻力位。

       你使用的时间周期越长,这些布林线的支撑阻力就越强劲。 许多交易者已经使用这类反弹,开发了很多的交易系统。尤其是当市场处于区间震荡和没有明显的趋势时候,这策略是最有效的方法。





       查看上述的图表,你可以看到布林带缩小了。而价格刚好开始突破布林带的上轨。 根据这些信息,你认为接下来价格将往什么方向去呢?