The chart below exhibits recent prices of Apple. The standard Bollinger bands are put in blue.
The graph shows plenty of valuable information. It is apparent from the chart above that the price pursues the upper band at the conclusion of May to the start of June and in July. There is a whole lot of times where the price works as a support or resistance during the movement from one band to another.
It is apparent that in the start of May and then in June, the stock overbought and the price went down on these instances.
The majority of programs used for charting with Bollinger bands make use of the settings as BB(20,2.0), meaning regular 20 bars with 2 standard deviation numbers. This is the common view, this is the way all the people uses this remarkable tool for trading. Whilst it is perfectly fine to use this method, there are several other techniques that are better and effective.
Start thinking differently from the common people and you might be able to gain more benefit from the signals of this tool. The following graph is based on BB(13, 2.0), meaning that 13 bars are utilized rather than the 20.
This graph provides you with far more information. The blues bars show the regular 20 bars and the bars are for the 13 bars. As you can see that the price moves more closely to the upper red band at many places. This setting seems to paint a much better boundary on all the three uptrends.
Moreover, the previous chart did not show that the lower band supported the price in the middle of may and middle of June. The 13 bar input seems to boost the accuracy of the price motion represented by the chart.
You must be thinking now that this is not a surprise. That is to say, if we lessen the lines down to one, then it would accurately follow the price motion in an accurate way. Nevertheless, if you wish to be one step ahead of the people with intraday trading then you should experiment with different time frames for the bands.
The following chart is based on an 8 period band. Take a look at the graph and see what you can predict about the trend and the support levels.
The graph shows plenty of valuable information. It is apparent from the chart above that the price pursues the upper band at the conclusion of May to the start of June and in July. There is a whole lot of times where the price works as a support or resistance during the movement from one band to another.
It is apparent that in the start of May and then in June, the stock overbought and the price went down on these instances.
The majority of programs used for charting with Bollinger bands make use of the settings as BB(20,2.0), meaning regular 20 bars with 2 standard deviation numbers. This is the common view, this is the way all the people uses this remarkable tool for trading. Whilst it is perfectly fine to use this method, there are several other techniques that are better and effective.
Start thinking differently from the common people and you might be able to gain more benefit from the signals of this tool. The following graph is based on BB(13, 2.0), meaning that 13 bars are utilized rather than the 20.
This graph provides you with far more information. The blues bars show the regular 20 bars and the bars are for the 13 bars. As you can see that the price moves more closely to the upper red band at many places. This setting seems to paint a much better boundary on all the three uptrends.
Moreover, the previous chart did not show that the lower band supported the price in the middle of may and middle of June. The 13 bar input seems to boost the accuracy of the price motion represented by the chart.
You must be thinking now that this is not a surprise. That is to say, if we lessen the lines down to one, then it would accurately follow the price motion in an accurate way. Nevertheless, if you wish to be one step ahead of the people with intraday trading then you should experiment with different time frames for the bands.
The following chart is based on an 8 period band. Take a look at the graph and see what you can predict about the trend and the support levels.
