Bollinger Band Trend
Two distinct trading styles arise from how a stock's closing price
behaves over a
series of trading days relative to the stock's Bollinger Band
envelopes (both the 1 standard deviation upper/lower bands as well as the
2 standard deviation upper/lower band).
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Stocks following or "walking" along either the upper or lower Bollinger
Band provide good signals for those wishing to trade trending or directional
stocks - the idea here is to trade in the continuing direction of the stock.
Consider this strategy when the Market is directional or trading sideways.
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Stocks that "Tag" either the upper or lower Bollinger Bands are potential
candidates to trade a reversal in direction - i.e. a stock that tags the
upper Band may then reverse direction and start trading downward eventually
tagging the lower Band and at that point make another reversal in direction and
start trading upwards. Consider this strategy mainly when the Market is also
range bound or moving sideways.
The signals in the "walking" table below identify stocks whose early price behaviour exhibits a Bollinger "walking" behaviour - the last four trading days fall within a tight upward or downward pattern along either the 1st standard deviation Bollinger Band or the 2nd standard deviation Bollinger band.
The second table identifies stocks whose price patterns have touched one extreme of the
Bollinger Band (upper or lower) and now on the most recent close has touched the other extreme.
See
Using Bollinger Bands To Gauge Trends for a good discussion on trading
both tagging and trending bollinger band patterns. You'll also find more Bollinger information
at Bollinger's website at
http://www.bollingerbands.com.
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