In this article, we’ll talk about a term called volatility. It’s a very important parameter of the financial instrument price, which is used for forecasts and trading.
Tag: bollinger bands
In this article, we will discuss several trading strategies using the Stochastic along with other indicators and single out their advantages and drawbacks.
In the description of the indicator in the book "Bollinger on Bollinger Bands", it is said that the price remains at the borders of the lines 95% of the time and escapes those borders in 5 remaining percent. If volatility on the market is low, the upper and the lower lines are close to one the other, while the price is trading between them; the higher the volatility, the wider the channel formed by the three lines (pic 1). According to the classification, the Bollinger Bands are a trend indicator as it shows both flats and directed price movements. The timeframe may be anything from M1 to a year.