Indicators Complementing Candlestick Charts ... - 2

By Nas.A | Journey To The Cryptocurrency Ocean | 3 Nov 2020

Indicators Complementing Candlestick Charts ... - 2

Bollinger Bands (BB)

If you are interested in cryptocurrencies. As I explained in my previous articles Fundamental Analysis and Technical Analysis and The Beauty Of Candlestick Chart, you need to know the basic technical analysis. I also gave information about the RSI and MACD, two indicators that help the candlestick chart. Reading previous articles will help you understand the topic. In this article, I will talk about the Bollinger Bands (BB) indicator that you should review along with candlestick charts.

It consists of stripes drawn above and below the standard deviation of the 20-day moving average. In the trend channels, prices move back and forth between the bands, the prices approaching the upper band constitute the signal of being ready for sale and the prices approaching the lower band.

Prices on the upper or lower band usually move and reach the other band. Bollinger Bands (BB) midband break is very important both as support and resistance. The break of this band can be considered as the change of the current trend.

As the mobility increases in stocks, the bands expand; The bands narrow as the mobility decreases.

The price moves in a narrow band in Bollinger Bands (BB). Afterwards, the band started to evolve as seen in the RSI and MACD. It gives the beginning of the beautiful uptrend. In an uptrend, price action is close to the top line. When the upper band fails to break three times, prices drop.

After the contraction in the Bollinger Bands (BB), a downward trend started. The decline begins after the doji formation on the candlestick chart. It confirms the downtrend in the RSI and MACD. In a downward trend, prices are close to the lower band.

Important Notes;

In Unstable Markets, the Bollinger Band creates a narrow channel. Prices stuck in the channel can be expected to jump after a while and create a new trend in the direction of the jump.
If prices cross the Upper Bollinger band, the uptrend can be expected to continue, and if the prices break the Lower Bollinger Band, the downtrend can be expected to continue.
If the prices are moving from the Middle Bollinger Band to the lower band, a decrease can be expected, and if they are moving from the middle band to the upper band, an increase can be expected.
If the prices close close to the upper band in two periods, an uptrend can be expected, and a downtrend can be expected if it closes in the lower band.
Bollinger Band can give more successful results in markets with high volatility.
It is considered as the beginning of the new trend when the Bollinger Band is widening, when prices are bouncing. When the arms widen, the trend change must be confirmed by other indicators.

Result:

As seen in the examples above, the Bollinger Bands (BB) indicator, which analyzes past price charts, gives you information about the trend. Bollinger Bands (BB) indicator works in harmony with RSI and MACD. Seeing these three indicators at the same time will guide you. You will learn the indicator movements in accordance with the characteristics of the crypto money you are following. As you practice, you will gain experience. You will turn this experience into profit. Listen to everyone but decide for yourself...