Ways to become an advanced trader with Bollinger Bands
Post your learning results by taping the discussion: TA Challenge: Breakout? Reversals? How to use Bollinger Bands?
Welcome back to this week's TA Challenge.
Before you start, let's review some patterns!
What are the six classic patterns of Bollinger Bands?
Tap here to see more case studies on Bollinger Bands patterns: How to use Bollinger Bands patterns like a pro?
Okay, what's new for today? As traders, we'd like to gather as much information as possible to make rational decisions. The Bollinger Bands indicator is good, but sometimes it's just not enough. Let's take a look at the magical combination of Bollinger Bands and other indicators.
1. Bollinger Bands + MACD
Some traders will use Bollinger Bands with MACD to support trade setups. The former focuses on the cyclical nature of volatility. The latter can be used to follow trends and momentum. Using them together could help make higher probability trades as they can gauge the direction and strength of an existing trend, along with volatility.
Thus, we could use the MACD to assess if a trend is picking up in momentum or slowing down and setting up a possible breakout. In contrast, the Bollinger Bands could be used as an entry trigger and subsequent confirmation of a trade.
Some traders will use Bollinger Bands with MACD to support trade setups. The former focuses on the cyclical nature of volatility. The latter can be used to follow trends and momentum. Using them together could help make higher probability trades as they can gauge the direction and strength of an existing trend, along with volatility.
Thus, we could use the MACD to assess if a trend is picking up in momentum or slowing down and setting up a possible breakout. In contrast, the Bollinger Bands could be used as an entry trigger and subsequent confirmation of a trade.
The chart shows a downtrend where the price starts to be traded within a descending channel. Traders can trade the breakout by looking for a slow downward momentum.
Pro Tip: We can look for a divergence in the histograms of the MACD (signaling potential breakout) and the confirmation of a breakout via a breach of the Bollinger Band, along with increased volatility and increasing momentum.
2. The Magic of BBIBOLL
Like Bollinger Bands, BBIBOLL (Bullish-Bear Bollinger) comprises three lines. The middle band is "BBI", which is the abbreviation of BBIBOLL, the long-short index. It is mostly used to make a trade-off judgment based on the strength of the long and short forces on the trend.
Pro Tip: We can look for a divergence in the histograms of the MACD (signaling potential breakout) and the confirmation of a breakout via a breach of the Bollinger Band, along with increased volatility and increasing momentum.
2. The Magic of BBIBOLL
Like Bollinger Bands, BBIBOLL (Bullish-Bear Bollinger) comprises three lines. The middle band is "BBI", which is the abbreviation of BBIBOLL, the long-short index. It is mostly used to make a trade-off judgment based on the strength of the long and short forces on the trend.
First, when the price trend shrinks and becomes open, and there is a positive line above the middle band, the trend might go up. On the contrary, when the price trend opens and becomes narrow, and there is a negative line below the middle band, the trend would fall.
Second, how to capture the chance to sell high and buy low?
For example, buy on the second day after the trend breaks the lower line in the first stage, and sell on the two days after the trend breaks the upper line. You could take the most of the rebound profits.
For example, buy on the second day after the trend breaks the lower line in the first stage, and sell on the two days after the trend breaks the upper line. You could take the most of the rebound profits.
1. Which time frame does the Bollinger Bands work best on?
It depends on your trading style and approach.
If you're a day trader, you may use BB on the lower time frame, like 15 minutes or 5 minutes.
If you're a swing or position trader, you may use BB daily or weekly.
2. Which type of trader are Bollinger bands suitable for?
This indicator could be helpful for traders seeking to find trend reversals when either the upper or lower channels of the Bollinger bands have been reached.
The reversals can last from short to long periods. They can be used for all types of traders who prefer intraday trading or position trading.
After acquiring the advanced and straightforward usage of Bollinger Bands, have you tried using these strategies to analyze the stocks you are following? Did you see any opportunities or encounter any problems?![]()
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Post your learning results in this discussion. You might receive valuable tips from experienced mooers.
Tap here: TA Challenge: Breakout? Reversals? How to use Bollinger Bands?
Post your learning results in this discussion. You might receive valuable tips from experienced mooers.
Tap here: TA Challenge: Breakout? Reversals? How to use Bollinger Bands?
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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搞经济 抄底 加仓 : if I use this on $Alibaba(BABA.US)$ , buy Dip, buy bounce. I would touch down SUN
by now and not the Moon. Think not suitable for me. As those shares I brought since to be an AI machine and it always out smart me 
CashLover1088 搞经济 抄底 加仓: it doesn't work on the stocks I bought, happens too fast and too slow to analyse
Wesley Moore : BB and BBIBOLL can be used to help any trader weather with the help of MACD to identify potential brake-outs following divergence in the MACD paired with a momentous breach in the BB.
frequent trades benefit most using the 5 minute BBIBOLL while traders locking to follow a long term trend will benefit more from daily BB an BBIBOLL readings.
if you can familiar yourself with the different patterns of the BBs story, you'll be able to predict the most profitable times to commit to your trade with fewer losses
steady Pom pipi : Wishlist added
Fei Hua : Wow
Raymond Reddington : I found BB is quite helpful to decide buy low and sell high, but of course it has to be combined with other indicators. I like to combined with MA, MACD, and CCI. That will give higher probability of profits. You will need to test out and experience it, and after a while you should be able to see some patterns to profit.
Aside from these indicators, news, quarterly earning results, macro and micro economics updates, and dividends will also play part in determining your profits.
Bruce teo : I hope to win more on moomoo
Linda Swanson : World peace is the most important
Dons hobby : I tried it a couple times but it is hard to see it without it being pointed out. With time and repatition I will get better I am sure.
Dons hobby : Thanks for posting this very helpful to use after I get used to it and try it a couple dozen times.
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