What is BOLL and how to use it? What are the disadvantages?
The basic type of BOLL is a banded channel composed of three track lines (upper, middle and lower).The middle rail is the average cost of the stock price (MA20), and the upper and lower rails can be regarded as pressure lines and support lines, respectively.
Basic signal:
①The stock price crosses the lower trajectory from the bottom up: a short-term reversal is possible.
②The stock price moves from the top down into the uptrend channel: the uptrend ends, a sell signal.
③Shares in the lower channel up cross the midline into the upper channel: may accelerate upward, a buy signal.
④Stock prices fall from the upper channel down into the lower channel: a possible decline, a sell signal.
⑤The share price has been in between the upper channels: the bulls.
⑥The share price has been in between the lower channel: short price
⑦When a stock touches the top line, it is considered overbought, and when it touches the bottom line, it is considered oversold.
Disadvantages and limitations:
If a moving average is used with a short period and prices fluctuate sharply in the short term, the channel can change a lot. If the stock price fluctuates back and forth in the midline, it needs to be analyzed according to other indicators, and BOLL's effect is ineffective. If you are a day trader, some stocks will jump short at the opening, which can cause the channel to suddenly enlarge, making the channel worthless.
$Hang Seng Index(800000.HK$ $HKEX(00388.HK$ $TENCENT(00700.HK$ $BILIBILI-W(09626.HK$ $BIDU-SW(09888.HK$ $BABA-SW(09988.HK$ $JD-SW(09618.HK$ $MEITUAN-W(03690.HK$ $BYD COMPANY(01211.HK$ $PING AN(02318.HK$
④Stock prices fall from the upper channel down into the lower channel: a possible decline, a sell signal.
⑤The share price has been in between the upper channels: the bulls.
⑥The share price has been in between the lower channel: short price
⑦When a stock touches the top line, it is considered overbought, and when it touches the bottom line, it is considered oversold.
Disadvantages and limitations:
If a moving average is used with a short period and prices fluctuate sharply in the short term, the channel can change a lot. If the stock price fluctuates back and forth in the midline, it needs to be analyzed according to other indicators, and BOLL's effect is ineffective. If you are a day trader, some stocks will jump short at the opening, which can cause the channel to suddenly enlarge, making the channel worthless.
$Hang Seng Index(800000.HK$ $HKEX(00388.HK$ $TENCENT(00700.HK$ $BILIBILI-W(09626.HK$ $BIDU-SW(09888.HK$ $BABA-SW(09988.HK$ $JD-SW(09618.HK$ $MEITUAN-W(03690.HK$ $BYD COMPANY(01211.HK$ $PING AN(02318.HK$
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ahwin :
Limth22 : How bollinger bands come together ?
Ally-LinOP Limth22: Boll index is a very simple and practical technical analysis index designed by John Brin, an American stock market analyst, according to the principle of standard deviation in statistics. Generally speaking, the movement of stock price always changes in a certain range around a certain value center (such as moving average, cost line, etc.). Based on the above conditions, brin line index introduces the concept of "stock price channel", which holds that the width of stock price channel changes with the fluctuation of stock price, and the stock price channel has variability, which will change with the fluctuation of stock price Change and adjust automatically. Because of its flexibility, intuition and trend, boll index has gradually become a popular index in the market widely used by investors.
By calculating the "standard deviation" of stock price, we can find the "confidence interval" of stock price. The index draws three lines on the graph, in which the upper and lower lines can be regarded as the pressure line and support line of stock price respectively, and there is also an average line between the two lines. The parameter of brin line index should be set to 20.
Limth22 :
Violets : such great info. can you set settings to just show the boll
Fat Cat Ceo : Should add what type of stocks boll is suitable. Volatile stocks like boll may not be suitable as the average prices can easily distort boll. It is best use when prices r constant esp gd at consolidation or sideways stage