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Trend Indicator: How to Gauge Trends with Bollinger Bands

Views 290KNov 1, 2023
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The Bollinger Bands are technical analysis tools often used in short-term trading.

Bollinger Bands comprise an upper band, a middle band, and a lower band, forming a channel around the stock price movement.

What do Bollinger Bands tell you?

Technical analysis traders believe that the closer the stock price is to the upper band, the more "overbought" the market; the closer the stock price is to the lower band, the more "oversold" the market.

In addition, the price exceeding the upper band means a higher possibility of drop, and it could be a signal to sell.

The converse is true for price breaking the lower band. 

The width of the band can reflect market volatility, with narrower bands indicating less volatility and vice versa.

How to use Bollinger Bands in practical trading?

You can use Bollinger Bands to analyze the stocks in your watchlist for potential short-term buying opportunities.

  • Open moomoo

  • Select a stock in your watchlist

  • Tap BOLL to show the Bollinger Bands

This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. It is provided without respect to individual investors’ financial sophistication, financial situation, investment objectives, investing time horizon, or risk tolerance. You should consider the appropriateness of this information having regard to your relevant personal circumstances before making any investment decisions. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeline for any particular purpose of the above content.

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