(9) Buying Or Selling When Upper Bollinger Band Pointing Nicely Up Or Down
It is one of the most surprising Bollinger bands trading strategies for every trader. Bollinger Bands® are non-directional indicators in nature.
But, when they are pointing nicely up then it could be an indication of a possible uptrend.
Similarly, when they are pointing down then it could be an indication of a possible downtrend.
However, when there is no trend or consolidation is taking place then these bands are likely to trade flat. A flat trend can be observed in squeeze pattern.
Some traders can utilize this strategy to make their positions in a script, index, or even bonds. They buy when upper band is pointing up while sell as soon as they start pointing down.
However, you can also utilize additional indicators like MACD & RSI indicators for better decisions. If MACD is showing positive divergence then it could be a buy signal. However, if MACD is showing negative divergence then it could be a sell signal.
On the other hands, when RSI is below 30, it could be a buy signal due to oversold positions. However, when RSI is above 70, it could be a sell signal due to overbought positions.
Image Source: Rockwelltrading
- Bollinger Band double bottom chart: Pinterest & Traderhq