Bollinger Bands

Bollinger bands are also a good way to determine the direction of the trend, but also weaknesses of respective trends can be made out.

For this we use the following Setup:

We insert Bollinger bands with 20 periods (variation 1) into our daily chart (24 hours).

We now note the medium (black) line of the Bollinger bands (this corresponds to the SMA20 - simple moving average). Is the course on this line, we are in a short-term uptrend, located the course including, we are in a short-term decline.

In the chart would that so ausssehen:

Now we switch window in the smaller 4 hours or 1 hour - the best we are opening a second chart for this.

The share in this chart touches the opposite outer line of current trends, so when an uptrend in the daily chart the ground, in a downward trend the top, we enter in the trade, since we are here in a short vulnerability of parent trends.

The exit should be then the in this case upper Bollinger bands line security sake when, so when the opposite.

It is essential here, as we move in different time periods, to ensure, at which time the Assembly or downward trend was identified and when the ground contact takes place.