Bollinger Bands; Key to boost your profit

The Bollinger Bands indicator is one of the popular technical analysis tools used in Forex trading. Here are some ways you can use Bollinger Bands in Forex trading:

Identifying support and resistance levels
The Bollinger Bands indicator can help you identify support and resistance levels. If the price of a currency pair approaches the lower line of the Bollinger Bands, this may suggest that it is a support level. On the other hand, when the price approaches the upper line, it may suggest that it is a resistance level. You can then look for confirmation of these levels using other indicators or technical analysis methods to decide whether to enter a long or short position.


Identifying trends
The Bollinger Bands indicator can also help you identify trends. If the price of a currency pair exceeds the upper line of the Bollinger Bands, it means that the uptrend will continue, and if the price falls below the lower line, the downtrend will continue. Then you can look for confirmation with other indicators or technical analysis methods to decide whether to enter a long or short position.


Price fluctuation analysis
The Bollinger Bands indicator can also help you analyze price fluctuations. When the prices of a currency pair are close to the lower Bollinger Bands line, it means that the currency pair is undervalued, so you can consider buying. On the other hand, when prices are near the upper line of the Bollinger Bands, it means that the currency pair is overvalued, so you can consider selling.


Detecting periods of volatility
The Bollinger Bands indicator can also help detect periods of volatility. When the Bollinger Bands lines are narrowed, it means that the currency pair is in a period of low volatility, so this may suggest that the following trend or price movement may be sharp. On the other hand, when the lines are widened, it means that the currency pair is in a period of high volatility, so the price movement may be more stable.


In conclusion, the Bollinger Bands indicator can be a useful tool in Forex technical analysis. It can help identify support and resistance levels, identify trends, analyze.
At Manticore investments we use it in conjunction with Haiken Ashi candles and RSI in our scalping - swing strategy. This combination allows us to more effectively read the supports and resistances of the bollinger bands and whether the price will break through them or not.