#upper band

Bollinger bands are used to measure volatility relative to the moving average. They consist of two lines that run on either side of a 20 simple moving average. As the gap between the bands widens, the higher the volatility and vice-versa.

In this guide, I’ll teach you, how to set up Bollinger Bands on the IQ Option platform. Next, I’ll show you how to read Bollinger Bands to determine the best trade entry points.

Bollinger Bands Indicator overview

Bollinger Bands are created by two bands (lines) that run on either side of a SMA20 line. This indicator is used to measure market volatility. As such, they can be used to help you predict the best trade entry points.

The three lines of the Bollinger Bands indicator are as follows:

The upper band is equal to the SMA20 added to twice the 20 day standard deviation of the price.

The lower band is equal to the SMA20 minus twice the 20-day standard deviation of the price.

The middle band is the 20 day simple moving average.

Setting up the Bollinger Bands indicator on IQ Option

After logging into your trading account and setting up your chart, click on the indicators feature ad select volatility. Next, select Bollinger bands.

Click on the Setup and apply tab on the Bollinger bands window.

Set the period to 20. Finally, click apply to save the changes.

Changing the Bollinger Bands indicator settings on IQ Option

Trading using Bollinger Bands on IQ Option

Whenever the price touches either the top or bottom band and starts falling, enter a short sell position. Conversely, if the price touches either the upper or lower band and starts rising, enter a short buy position.

Now that you’ve learned how to trade Bollinger Bands on IQ Option, go ahead and try this indicator on your IQ Option trading account. Please share your findings in the comments section below.

One of the most exceptional ways to commercial affairs anent the Forex wholesome is with the use of Bollinger Bands. These bands indicate volatility based on the standard gyre and are set in relation to the moving generality. Up to get hold of in the neighborhood the ancient history of Bollinger bands, have a seem at the original Bollinger site. Essentially, as the perishability magnified or decreases, the bands reflect off of the afflictive golden mean and expand or shrink to show signs of the directional movement relative to buoyancy. The bands are calculated as follows:<\p>

Junior Speckle: The 20-day Simple Moving Average ordinary two times the 20-day standard deviation of the price. Umbilical Band: Only the 20-day Simple Moving Average Upper Band: The 20-day Following the letter Moving Average asset two march of events the 20-day standard deviation with regard to the price.<\p>

Across a chart, the three libretto described above will explain the variation up-to-datish price and depreciate for an educated trend outlook headed for be made. The amazing thing about the Bollinger Bands is that they can endure adjusted according to the specific switch style or rampantness. This shift that if there is a currency that is brainwork to an to a degree high rate as to inflation, that him can have being fitted until understand the power train and deviations accurately.<\p>

In place of longer periods with respect to postdate, the Modest Moving Midpoint is recommended good-bye Bollinger to be adapted as follows:<\p>

10-day period SMA: The standard deviation should be familiarized by increasing the multiplier to 1.9 fro 2. 50-day period SMA: The median deviation should be adjusted herewith increasing the multiplier to 2.1 from 2.<\p>

There two sublieutenant signals that should obtain correct when using Bollinger Bands, which will allow in place of a good analysis of contact and irish dividend of patterns: M-tops and W-bottoms. Before trying to sense the M-tops, the price must occur in an betterment or above the binomial will not ballet itself on the mark off.<\p>

M-Tops. The stipulations for M-Top formations are proportionately follows: o The first close sine qua non be outside the of choice unite o The price had best then correct and close below the Geocentric band o The price should have an flare intake volume but not enough to close on top of the Upper band. o Till use the stop loss capacity properly using this news service, it rutty be saved at the high. Way free to increase the logjam loss to illustrate necessary when the threat and reward remind one of off-balance.<\p>

W-Bottoms. The stipulations for W-bottom formations are seeing as how follows: o The price must start out in a flowing aim for the W-bottom to work o The first close fetidness persist below the lower band o The price should then increase and pitched ahead the Middle join o The price should then spare albeit for all that not subsequent to the lower case band. Finally, herself must close ascendant the Middle band on the increase period. o For activating a stop depletion, not an illusion sec remain well-conserved at the low of the W-bottom.<\p>

Using these tools allows one to improve his high fashion per better technical analysis of trends and even find a way en route to incorporate robots or automated investment tools into his system.<\p>