What are Bollinger bands?
Bollinger bands are the technical analysis indicator that helps you and traders like me to predict the upcoming trends and reversals in the market. this indicator is made from the composition of Standard deviation and Moving average ( Exponential moving average).
How does Bollinger Bands work?
Given above is the example of Bollinger bands. As, I said above this indicator is made from the composition of standard deviation and Exponential moving average. the upper line and lower line as you can see above is this standard deviation meanwhile the middle line is the moving average.
The upper line and lower line are based on the concept of support and resistance. when the price touches the lower line they are supposed to bounce back up and vice versa when the price touches the upper line there supposed to bounce back down. you can also use the indicator to measure the volatility rate of the price. the price channels widen when the price volatility is high and shrinks with the opposite case of low volatility.
How to set up Bollinger bands on IQ Option?
Firstly, log in to your IQ Option account. In case you don’t have one, below fill out the form below.
Secondly, click the indicator button and search for Bollinger Bands. then click apply. you can always adjust the settings of the indicator or change the colour.
Bollinger Bands Strategy: How to open Short and long with Bollinger band on IQ Option account?
Opening deals using Bollinger bands is very easy. the indicator works best with long-period charts and trades.
As you can see above the marked points when the price hits the lower line signals an upcoming bullish trend. and here you can open long positions.
Similarly, when the price hits the upper line it signals an upcoming bearish trend and you can open a short position here.
So, this is the whole concept of Bollinger bands. I will highly suggest you try this trading strategy on the IQ Option demo account and once you are confident enough you can shift to the IQ option real account.
Till then. I wish you all the best for your trading career!!