Bollinger Bands

One of the most famous indicator of them all is called the Bollinger Bands and its name is deriving from one of the biggest traders out there, Bollinger.

Bollinger Bands indicator is a trend indicator and as a consequence is to be found under the trend indicators category on all the trading platforms used.

It is formed out of three different lines called upper Bollinger band, middle Bollinger band and lower Bollinger band. By far, the most important one is the middle Bollinger band and this is the one that can be modified as the trader wants.

In the Metatrader platform, the most popular trading platform of them all, for example, the middle Bollinger band comes as a simple moving average (SMA) and this is in the standard or default settings.

However, in our recordings here that are coming with this project I am using the Jforex platform and it is possible to use different averages for the middle Bollinger band. Actually, this is possible for the Metatrader as well, but in this case it will have to be a custom indicator and this custom indicator should be uploaded as a separate thing on the trading platform.

However, it is possible and a simple Google-ing over the Internet will show you how to do that.

In this project, as it can be seen in the recordings, I am using an EMA (exponential moving average) for the middle Bollinger band and this is important as values are different than in the case of a SMA.

The standard interpretation is that anything that is above the EMA is considered to be bullish, so we should look to buy call options and, of course, everything that is below the EMA is considered to be bearish and we should buy put options.

Therefore, by far, the most important line of the three lines there is the EMA and we are interested to know what price is doing every time is testing the EMA.

To find out the strategies and where to buy call and put options using the Bollinger Bands indicator, please make sure you are watching the whole series, namely 4 different recordings, one for each part, as they are being linked together.

This project is part of our Trading Strategies That Work series you can find here on www.binaryoptions.education and the recordings and video analysis are uploaded on our official Youtube channel.