Tuesday, March 3, 2009

The tactics of trade on the Bollinger Band

The bands Bollindzhera ensure its effectiveness, two important characteristics. First, they show the main axis of the trend range just as the price or Moving averages. Secondly, they are compressed or expanded during the movement. The interaction between these two features creates a unique model where the price bars penetrate the border strips. Japanese candles work especially well with bands Bollindzhera. For example, "Dozhi, penetrating through the compressible strip, effectively signaling the short turn.

The bands Bollindzhera curve and turn in response to price movements. These sinuosity predict how far trends should continue, before the central tendency of returns them back to the central axis. The complex relationship develops between the direction of the price band and the compression of the price band. For example, the trend tends to pause, when to shrink the band resist this. Requires some experience to predict the final impact on the price band, but the effort to stand. More than any other tool, strip Bollindzhera accurately determine subtle fluctuations and signal that the door is open or closed for a profit.

The bands Bollindzhera can fluctuate through relative maxima or minima, and then recede proportionally restoration to begin next push trend. Or they can enter into the extended range, keel and fro without a specific direction. Movement frequently stops entirely in his direction, when the price rises in the direction of the incident band or decreases in the direction of increasing the band. Side horizontal bands may appear in the side bands, and the market trend. Price is often unable to reach a new maximum or minimum level, while the band did not expand to clear the road. The bands Bollindzhera in many cases, predicting the time better than they predict price.

Alert purchase


The upper band Bollindzhera increase testing of intra-day peak, while the price of "Worldcom" decreases. This strong divergence signals a possible breakthrough after the price, finally, the full spread of the lower band. Carefully observe the inclination of the band, when the price bars return to test important maxima or minima. This often shows time and the necessary force to push the price through the barrier of resistance or support.

Experienced traders are watching a short strip in real time to assess the effect of buyers or sellers required to nudge them in any way. They work extremely well in the second test of an important peak or minimum. When the market finally burst, expanding bars often fly to the edge of the band, where congestion forms a flag until the bands Bollindzhera will not initiate further movement. The bands of strongly compressed around the shrinking price range on the side markets. In this case, the methodology NR7 (see previous issue), to expect the approaching time of the positive feedback between the stripes and the price.

The bands Bollindzhera served early warning signal to change the trend. The sharp price movement is forcing the band to expand outwards. When these active markets finally turn to the stage of lateral trade, the band slowly pressed to the price. Time passes and the "door" ????? Bollindzhera rose at a rapid vertical movement. Required experience allows the trader, traded on the oscillations quickly estimate the time, to be held before the band sozhmutsya and therefore plan their trade.

Strong buying or selling may push price well beyond the lines. In extreme circumstances, a long bar or even fully formed outside the barrier. Total tactics suggests that the strengths Facing often follow these major violations of the bands. But trading against the motion carries with it certain risks, as well as markets may create a small series of such volatile bars before you begin turning. Also note that this price action rarely occurs during the day, with the exception of the opening.

Reduce the risk of moving to a smaller format in the interim, and looking forward to turn it before making a counter-trend positions. The chances also increase if the burst bars face other forms of resistance and support, making for a level of mutual input. Stay safe during a trade. As soon as the price returns to the limits of the bands, the main trend could easily prevail, if the rollback does not make a turn the other signals. Search for "veil of dark clouds", or similar candle pattern that fills a GEO, the generated price bar outside lanes. This complex composition can bring windfall profits with proper management.

Traders who trade on the movement, working quietly in the middle of ????? Bollindzhera for stable profits. Build your strategy in such a way as to enter counter-trend position near one lane in and out the other. Such tactics, trade on the movement, faces a much less rapid turn than at the entrance to the breakthrough bands of the extrema. Keep in mind that the central band is a natural limitation of profits, which must be taken into account when calculating the ratio of return to risk. Make sure that the safest way around this central strip still provides a decent profit for the transaction.

Multiple resistance and support


A wide range of presents favorable conditions for trade on the movement for "KLA-Tencor". This 13-periodnaya band Bollindzhera combined with the simple horizontal resistance and support to expand the natural area at the extremes of turning lanes. Come into the counter-trend position when the previous bar turning points for a candle line strip. Expect a breakthrough central lane, if there was no clear signal. Out of position if the price is not expanding quickly in another direction or if the signal fails and there is no shadow of a candle. Carefully watch for support and resistance for the positive feedback between the price and stripes, which will ultimately put the price of the lateral market.

Use a variety of time scales Bollindzhera to avoid costly mistakes on the trend. Consider the same market in the 3 different time scales. This will be one of the larger and one smaller scales on the one chosen for this work. Each scale provides a different range of extremes of the bands and the relative location of price within the limits of the indicators. Measure the ratio of return to risk in its current time format, but keep in mind all the support and resistance in the other schedules. Look left there during the retention of position enough time to develop and the price could reach targets at other levels of the bands.

Keep in mind that all bands change dynamically in accordance with the price. This provides continuous feedback between the price and the bands that alter the target values for each bar. Relevant work experience with this powerful indicator helps traders trading on the movement in advance to expect it will move. The longer the price is in the side band, the band becomes narrower. Changing trend of the first bands to begin with turning lanes, closest to the prior price trend. For example, when the rising price trend is along the top band, expect when the side turn indicator down before his second colleagues before the price moves in a lateral band or descending trend.

Combine Strips Bollindzhera with dynamic indicators. This helps to filter out the direction of movement of the side bands, and improves the timing of the trade. Add the strips of moving averages to price and display the MACD-Histogram at the bottom of the chart. Price often remains well within the limits of compression bands in the early stages of a new positive feedback between the price and stripes. When these indicators show rising momentum, shift its attention to the natural levels of breakthrough patterns or stripes, and are looking for an opportunity to input in the shrinking of price bars.




Forex Magazine
based on www.hardrightedge.com

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