Bollinger Bands
Basic Bollinger Band Trading Strategies 1. Bollinger Band Bounce (Reversal Strategy) 👉 Best for: Range-bound markets 📌 How to Trade: Buy when price touches the Lower Band and shows a reversal candlestick (e.g., Hammer) Sell when price touches the Upper Band and shows a reversal candlestick (e.g., Shooting Star) 🎯 Target: Middle Band or opposite Band 🛑 Stop Loss: Below/above the recent low/high Example: If a stock is trading sideways and touches the Lower Band, expect a bounce upward. 2. Bollinger Band Squeeze (Breakout Strategy) 👉 Best for: Identifying strong breakouts 📌 How to Trade: When bands contract (squeeze), it signals low volatility Wait for a breakout (price moving outside the bands) Trade in the direction of the breakout 🎯 Target: Move equal to the previous range 🛑 Stop Loss: Below/above breakout candle Example: If a stock consolidates within narrow bands and then breaks above, it signals an uptrend. 3. Bollinger Band Riding (Trend-Fo...