All language subtitles for 4. Bollinger Bands Super Useful, Walk Up And Down The Band

A great indicator for measuring volatility and using using it as part of your overall tools to, you

know, buy and sell security at the right times is one of my favorites, which is the Bohlinger band.

And I love Bohlinger bands because they're named after me, Steve Ballenger.

Well, they're not.

They're named after some guy named John Bohlinger.

I wish it was named after me.

So you can see it's Palencia versus Bolinger.

OK, great.

But it is very, very popular and useful as a volatility measure.

So let's look at Bollinger bands and how they're used and they're very easy once we go through this

list.

You'll find that they're very easy to understand and apply.

So I think you'll like Bollinger bands as well.

So kind of what are they?

Right.

So it's a simple but powerful calculation, you know, that's going to be put on top of your chart here.

When you use your train platform, you just choose Bollinger bands and you'll show this nice graphic.

And we're going to look at some here in a moment here.

So you get a feel for what looks like and how to trade off it.

But basically it's doing is it's taking the 20 day simple moving average.

You know, that's moving average line and that's simple moving average of closing prices.

And then that's kind of like the meme kind of line.

And then there's a band on either side, above and below it, that has two standard deviations, two

standard deviations away from that simple moving average standard deviation, looking at that deviation

from a mean from that to, you know, from that simple moving average.

And so the bands are going to show the relative highs and lows in the context of that moving average.

So they're going to travel together.

There's going to be one below are assuming one above, one below, and they're going to have moving

average kind of going along and they're all going to kind of travel together, but then they expand

and contract to and that's very important.

So in effect, the bands are moving standard deviations that you can measure volatility and used to

trade off of as well as these go forward.

So let's look at the example of Belgium and see what this looks like and I'll make a little more sense

here.

So here is just this could be anything, could be any security, because the Bollinger bands are going

to look the same or they won't look the same.

The pattern won't be the same.

The patterns will all be different.

But how it works is the same.

So you can see we've got our price bars up and down, black and red price bars or volume on the bottom.

They're going left to right as far as back in time to more near time.

And you can see in the middle there, we've got these dashed line or a dotted line.

I kind of dotted line going through the middle of these two bigger bands, these two solid lines, one

above and one below, middle line there.

That's our 20 day simple moving average.

Right.

That's the.

And then the two standard deviations above and below as that moving average goes forward is the high

and the low of those of those Bolinger bands.

And that can tell us quite a bit as far as now, if we see this, there's different things are going

to tell us what to do in terms of trading.

And that's what's really important, to get a feel for what these kind of look like.

And we're going to show you actually how to how to trade off it.

So one thing we are looking at, Bollinger bands you're looking for, we're visually you're looking

for walking and squeezing.

All that sounds like fun, doesn't it?

A price touching or slightly breaking up beyond, like upper or lower band is a continuation signal

of a trend.

Right.

That's a good thing.

Right.

Remember the whole classic phrase.

The trend is our friend.

We want to identify and know trends.

So when it's slightly it's slightly less touching or slightly breaking that it's called walking up or

walking down the band, those upper and those lower bands.

So during an uptrend, walking up the up the band, the prices are hugging that top line.

And as those prices start to exhaust and you see those higher highs are not being reached, you'll start

to come off that and the price will start to move down towards the center, down towards that simple

moving average and then possibly be it down towards the lower band.

So when it's hugging those brands, that's showing us, that's a continuation signal of a good trend

that's telling us here.

The trends there, we can buy into that trend or we're already bought.

We want to stay on that trend depending on whether it's uptrend or a downtrend for walking down the

band.

It's just the exact opposite.

It's on the lower band hugging the band and then it comes off that band.

It's the price.

They're going to start moving up towards the middle.

So it's just basically the opposite opposite.

So walking up and down bands are great continuation signals of a trend.

The trend is established and that's going to continue on now, squeezing as these bears are squeezing

here when bands contract.

So the overall bands are getting closer together.

I'll show you this.

Don't worry, just a going to show you this, but it can show that traders are indecisive.

There's not much standard deviation in the price range.

There's not much difference in prices.

So things are starting to contract and traders are indecisive and they're not willing to go to new highs,

but they're also not willing to go to new lows either.

Everything's starting to narrow out.

There's less volatility.

It's narrowing out, it's squeezing together.

And that's what's going on here.

The narrowing of the trading range, the Bollinger bands get closer together, that high and that low

get closer together to the middle.

And that's called the squeeze.

And implies an impending breakout.

It's either going to go higher or lower at some point here, but something's happening, you know,

so get ready or something may happen.

Hopefully something good will happen, which would be a new trend, a new established trend.

And if we can start locking up a band that tells us something or walking down a band, that's that continuation

of the trend.

The squeeze is kind of telling us that something is going to be changing.

So it's important to know that when when you're looking at Bollinger bands, are you in a period where

things are walking up or down a band?

Are they squeezing or are they in the process of one of those two things happening?

So let's take a look at an example chart here and see what we see.

Do you see where it might be walking up the band?

Right.

So the middle is the dashes.

It's the middle of our band.

Upper is the top and bottom is the the bottom of the band.

So if we're walking up the band, we're looking at our top band.

Do you see places on this chart where it might be walking up the band and then also looking at that?

Think about is there a part where the bands are getting closer together, where they're squeezing together

all those known as the screens?

You know, there might be one definite place, but maybe there's another place we're squeezing together,

too.

So we were looking for walk of the band and squeezing of the band.

All right.

Let's take a look and see what we see here.

So I would say if you look at you can see how the prices are touching or exceeding on the far left.

Let's start at the far left.

You can see where it's walking up the band right prices are either above or touching or close to that

band, you know, so that's walking the band.

And you can see it's a continuation of a trend.

It's definitely an up trend, actually, a nice, strong uptrend, you know, looking at that where

it starts.

And so that would be an indicator to me, depending on when I get in on this trend, I'd say, hey,

this trend is strong.

It's looking good market sentiment.

The volatility is all looking good.

I'm going to hang with this trend.

I'm going to buy it.

I'm going to hang in till I start reaching that peak.

There you see how it starts to come off the top of that, the bone off the ball and your at the top

and starts turning red.

The price bars and starts going down.

That would be a pretty good indicator that even after first day or two that I'm definitely off the trend.

I want to I want to sell now because it's definitely off that trend as it moved towards the middle.

If we keep going to the right there, you can see the squeeze.

Now, this is a pretty good example of squeeze.

It's almost like a steak, right, where you know, where they've got a thin middle there.

Maybe a couple things.

So it's wider in two parts.

And the snake digesting lots of stuff.

You can see where it's squeezed together.

The upper in the lower band are squeezed together very close to that middle where the dots are, where

we were walking up the band.

See how far away they are here.

We've squeezed together.

Now, Squeeze is telling us what tells us we're in a narrow trading range, less volatility.

Traders are indecisive.

They're trying to figure out, should we go higher?

Should we go lower?

There's a little bit actually touching the bottom of the squeeze there.

We're touch with the band for a little bit, a little walk the band down there.

But it really stays in this longer time frame of the squeeze.

OK, so what happens at the end of the squeeze?

Do you see it?

There's a gap.

Do you see it at the very end where often it jumps up to the upper end of the band and starts to go

up from there.

So that's a breakaway gap.

If we learn about when we talk about breakaway gaps and how we see a breakaway gap, we see the next

day that's kind of confirming that we're looking at our Bohlinger band is another confirmation of a

breakaway gap.

See how we're using multiple things together.

And now we're on a walking up the band again.

And I'm going to walk up that band and I'm going to going to sell once that comes off that band and

then kind of repeat that process with the squeeze and a little bit of squeeze there.

And then another walking up the band, it really never really squeezes that tight, never really and

gets all that way into the simple moving average right on top of it or crosses the line.

Another way you can use this with moving averages that across the simple moving average line, you know,

so this is where you can use these types of indicators together.

And we saw a little bit on the far left.

There's a little touching of the law banning times.

This doesn't really walking for very long.

But if it was this was this is a particular case where it's a real strong uptown.

So we're really showing walking up the bands, walking down the bands would look would look different.

Let's look at another example real quick that has some, you know, a little bit a couple more examples

just to reinforce this here.

So, again, look for walking on the band.

Look for a definite there is some definite cases where they're getting closer, touching to that, walking

down the band more than we saw in the previous chart.

And do you see a squeeze?

Do you see the squeeze in there?

So you might see where where things are going walking up and down the band here.

This is happened before Proctor and Gamble of Consumer Products stock.

So we look at the far left.

You can probably saw there right where it's walking up the band.

We have a nice little gap on the band, comes off the band a little bit, but it walks it up a little

bit.

And then we've got some volatility.

There are some ups and downs, some big downs.

So you see those as we move to the left or the right or the right to the left, you will see those red

candles coming right into the right, into the squeeze.

It gets very narrow, actually touches the bottom band a little bit, walks down the band a little bit,

but it starts to really narrow.

People are indecisive.

This starts to.

Above that simple moving average, that's a big indicator when our prices get above that simple moving

average, as we learn in the moving average lesson, and then we get on that up walking up the band

and we have that nice, strong trend of walking up the band.

And then as we go to the far right, you'll see where it walks down the van a little bit and another

squeeze is forming and starts touching the band a little, get a little bit.

And we see in the middle there, too.

I didn't label, but we've seen the mill that really long red one right in the middle there with some

volatility to it.

You know, that's a real outlier, right?

Like in one one day, the price went as far as the price range, you know, and the price itself, you

know, started above the moving average line, moved above the Bohlinger line.

That was an opening price.

We know it's opening because it's a red candle and we are and we know it closed lower because it's a

red candle.

And so we know that opening price was above the upper Bollinger band in the price range, even a little

bit above that on the high on the on the upper shadow.

But then it went way down.

Something happened one way down, not only passed the upper Bollinger band, but past the simple moving

average, way past that and then almost getting towards the bottom band.

So what a crazy day.

So if you're a trader, you might be like one.

You might not be in this at all because it's not either walking up or down a band the day before.

It's right in the middle.

So you might be on the sidelines at this point.

And then this happens and you're like, this would be a great opportunity to say what's happening here.

I need to let this develop a little bit more and you'll develop.

And it's kind of staying in the middle there and it starts to move up, but it never really moves up

or down until he gets to the squeeze.

Well, there's a walking down the bench before the squeeze on the far right.

But you can see by losing our Bollinger bands, we can kind of measure that volatility.

We can see where there's a big market, volatile moment here and our prices kind of match up with them.

And but we can take our action based on these indicators around that.

So if you look at Bollinger bands, you can see that they're very easy to kind of, you know, observe

and look at.

Right.

I'm looking at the upper band that lower than that simple moving average, I can apply it to any type

of security, you know, and all that in any type of time frame to and it really gives me a good indicator

around that.

And I think it really looks good as an experiment with another indicator to get that confirming there's

a primer or getting another one as a confirming signal or using the Bollinger band as a confirming something

you're seeing and using bullying your band.

And again, understanding of volatility and market sentiment and using that, whether you're walking

up the band or walking down the band or maybe just squeezing together volunteer bands, there are a

lot of fun which they were named after me, though.