10 Profitable Tips For Day Trading With Bollinger Bands

Profitable Tips For Day Trading With Bollinger Bands. Day trader standing in front of technical charts with Bollinger bands.

(2) Spotting & Analyzing Strength Of Uptrend With Bollinger Bands

It is one of the most significant tips for day trading with Bollinger bands. Bollinger Bands® can help traders or investors to assess the strength of an uptrend. This technical indicator can also tell us when the asset is losing strength or reversing its trend.

According to a post published in The Balance, there are three valuable guidelines for using Bollinger Bands in an uptrend:

(a) When the price is in a strong uptrend it is likely to touch or run along the upper band. If it fails to run or touch along with upper band then it indicates that uptrend may be losing momentum.

(b) An uptrend may be accompanied with drop in prices. It is usually referred as pullbacks. During a strong uptrend, the pullback lows will typically occur near or above the moving average line (or middle band). This pullback should never stop (stall) near the middle line. However, if it does then it indicates that uptrend is losing strength.

(c) When the price is in a strong uptrend it should never touch the lower band. However, if it does then it’s a warning signal for a reversal.

Thus, intraday traders should use pullbacks in an uptrend to make new entries or buy positions by keeping stop loss order at lower band.

[Read Also: 15 Characteristics Of Bollinger Bands In Technical Charts]

(3) Finding & Analyzing Strength Of Downtrend With Bollinger Bands

It is one of the most valuable tips for day trading with Bollinger bands. Bollinger Bands® can help traders or investors to assess the strength of a downtrend.

This technical indicator can also tell us whether the asset is losing strength or reversing its trend. Here are three valuable guidelines for using Bollinger Bands in a downtrend:

(a) When the price is in a strong downtrend it is likely to touch or run along the lower band. If it fails to run or touch along with lower band then it indicates that downtrend may be losing momentum.

(b) A downtrend may be accompanied with increase or rally in prices. It is usually referred as pullbacks. During a strong downtrend, the pullback highs will typically occur near or below the moving average line (or middle band). This pullback should never stop (stall) near the middle line. However, if it does then it indicates that downtrend is losing strength.

(c) When the price is in a strong downtrend it should never touch the upper band. However, if it does then it’s a warning signal for a reversal.

Thus, traders should use pullbacks in a downtrend to make new entries or short positions by keeping stop loss order at upper band.

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