Bollinger Bands
Within our curriculum Bollinger Bands out as a key indicator
Bollinger bands are used to measure volatility. In other words we use to know whether the market is quiet or altered. When the market is still the bands tend to be narrow, approaching the center, when the market is expanding altered bands or widen.
The figure below shows the Bollinger Bands when the market is quiet and upset.
When the market is still the price tends to go downtown, that is if the price moves to the edge of a band, it is likely that the price back to the center. If the price breaks the band and can close out of it indicates the beginning of a trend. The figure below shows two situations:
