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Bollinger bands definition and strategy uses

The Bollinger bands are names after the technical trader who invented them, John Bollinger.

The Bollinger bands were developed to predict how much the market is volatile or to signal the trader that it is volatile, the Bollinger bands will widen further away from the average deviations in times the market is too volatile and go near the average deviation in times the market is more stable.

This is a very famous method of getting early signals on how much volatile the market is and if the prices move to the upper band, it means the market is overbuying, if it moves to the lower band it means the market is overselling.

Bollinger bands in algo-trading (With Expert advisor)

Many EA’s are using strategies that target trend changes, so the EA will know when it is best to buy or sell, trend changes can be predicted at almost real-time if the right signals are applied, you can apply the Bollinger band as one of the indicators for predicting volatile market or change of trend.

Video about using the Bollinger bands as a strategy: