How useful are Bollinger Bands in a trading strategy? Bollinger bands were created in the 1980's by John Bollinger. These bands are basically a moving average with two trading bands above and below the moving average line. The formula used in Bollinger bands adds and subtracts a standard deviation to arrive at an upper and a lower band. The theory behind the bands is that they will move with the volatility of the market. When the market becomes more volatile, the bands will widen. When it is less volatile, then they narrow to a very narrow range. Bollinger bands work kind of like a rubber band that is being tightened. The tighter the bands get, the more likely it is that there is going to be a change in the trending line. Also, as the price moves to the top of the Bollinger band, it may be an indication of a overbought situation. The closer they move to the bottom line of the band, it may be an indication of an oversold situation. It is possible for a stock to trade within a range for a period of time. http://www.techtradersystem.com/articles/How-Useful-Are-Bollinger-Bands-In-Trading-Strategies-258.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=258 Technical indicators are common technical tools used by traders worldwide in FOREX and other markets. In this article we will present the 3 most powerful indicators for FOREX trading.1 - Bollinger BandsDeveloped by John Bollinger in the 80s, Bollinger Bands are one of the most powerful trading indicators. They provide traders dynamic support and resistance levels that are based on market volatility - and are very useful for gauging trend and range. Traders can use the Bollinger Bands to estimate overbought and oversold periods if prices are near the lower band they are oversold, and near the upper band they are overbought. This way this indicator can act as a leading indicator and produce reversal trading signals. 2 - Moving AverageMoving Average is also a highly powerful trading indicator - not as a trend-following indicator, but as a leading one. At IndicatorForex.com, we trade moving averages in a unique way - as a retracement zone. In this way, the trader waits for price to retrace and test the moving average as support\resistance level. If price bounces on the moving average, a trade is issued. http://www.techtradersystem.com/articles/3-Most-Powerful-Trading-Indicators-For-Forex-268.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=268 The Forex trading is an enthralling method of make money online, if you are eager to enter into this enthralling Forex trading platform then you must learn about the indicators that will give you information regarding the Forex trading inflows. The two important indicators are Bollinger Bands and Fibonacci Retracements. http://www.techtradersystem.com/articles/Forex-Indicators-Bollinger-Bands-And-Fibonacci-Retracements-269.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=269 Leading indicators are few and far between for traders looking to gain an edge in the e-mini markets. Retail traders spend the majority of their time focusing on lagging indicators such as MACDs or Bollinger Bands. These indicators do more harm than good for the uneducated trader. Professional traders know that in order to get an edge in the market they need to use the NYSE TICK chart to get a read on future market sentiment.The NYSE TICK chart is available in all the major charting and data feed packages provided by brokers. The actual chart itself is very basic in its mathematically components. The chart plots the ratio between the up ticking vs. the down ticking stocks on the New York Stock Exchange. In short, the more stocks ticking up the higher the number will be on the chart. The more stocks ticking down, the lower the number on the chart will be.Experienced e-mini traders use the chart in a variety of ways but the simplest way to understand its benefits is to use the chart to identify extreme overbought and oversold market conditions. http://www.techtradersystem.com/articles/Emini-Trading-Use-The-Nyse-Tick-To-Improve-Results-901.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=901 How do you measure the volatility in the market? Price volatility in the market is mostly measured with the standard deviation. Bollinger bands are technical indicators that plot the standard deviation of the price action. Two bands are plotted. One above and the other below the moving average. The period of the moving average is 20 mostly as this time period effectively represents the intermediate trend.Bollinger bands may be applied to any market or security. Any timeframes from daily, weekly, monthly to intraday can be used. Primary advantage of using these bands is to check if the prices are relatively low or highBands will be narrow when the volatility in the market is low. These bands expand when the volatility in the market increases. This information can be especially useful to options traders as options prices are heavily influenced by the swings in volatility.When prices move above the upper band this is a sign of great strength and when they move below the lower band, a sign of great weakness. When prices move outside the bands, trend continuation is often a valid assumption.Rapid and substantial price moves often tend to happen after the band tightens. http://www.techtradersystem.com/articles/Mastering-Bollinger-Bands-Can-Be-Highly-Profitable-261.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=261 From the onset, let me say that Bollinger Bands, developed in the early 1980's by John Bollinger can be a very effective aid in your trading arsenal. I personally used them for years when I traded professionally, but have since slacked off using them in favor of a different methodology. This does not mean, by any stretch of the imagination, that Bollinger Bands cannot be meaningful and helpful in your trading effort, and there are days when I am having trouble getting a read on the market action that I will add the Bollinger Bands for added insight into the days market action, especially if the price action is particularly ambiguous.As I have drifted from theories centered around static volatility toward more dynamic volatility, specifically chaos theory and fractal formations, I gradually moved away from Bollinger Bands. I would also point out that John Bollinger was one of the first to implement a system that incorporated dynamic volatility into technical trading with Bollinger bands. http://www.techtradersystem.com/articles/Should-You-Use-Bollinger-Bands-271.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=271 Forex Strategy Builder is a platform for creating, testing and analyzing trading strategies for the forex market. It provides an easy way of building forex strategies by combining various technical indicators. All necessary parameters and logic rules can be selected from menus, and you do not have to write formulas or a program code. Forex Strategy Builder uses real forex data to perform back tests for the various foreign exchange pairs or time periods and calculate the real life result of the strategy. It supplies detailed charts and statistics, and the automatic journals show all transactions and positions, as well as the changes in your virtual bank account.When first started, Forex Strategy Builder loads the default strategy New.xml with the historical market data for the strategy, calculates the test and displays the information in charts and tables. The program recalculates the test every time a change in some of the elements is made which may affect its results. For example, if we change the symbol of the instrument, the data period or some of the indicators, Forex Strategy Builder will immediately perform the necessary calculations and show the due charts. http://www.techtradersystem.com/articles/Forex-Strategy-Builder-1367.asp http://www.techtradersystem.com/articles/publish-article.asp?articleid=1367