Bollinger bands gold

Bollinger Band® Definition


bollinger bands gold

Apr 23,  · Bollinger Band®: A Bollinger Band®, developed by famous technical trader John Bollinger, is plotted two standard deviations away from a simple moving average. Sep 25,  · Bollinger Bands are an excellent technical indicator for traders to keep an eye on. And right now, they are signaling a potential options trade on Gold specifically, the Gold ETF (NYSEARCA:GLD).Author: Gavin Mcmaster. Explanation to Bollinger's Bands. Bollinger Bands was created by John Bollinger in the early s, which purpose is to provide a relative definition of high and defintion is used to identify buy and sell signals and have proven very well in doing so.

A complete explanation of Bollinger Bands

Trading bands and envelopes serve the same purpose, they provide relative definitions of high and low that can be used to create rigorous trading approaches, in pattern recognition, and for much more. Bands are usually thought of as employing a measure of central tendency as a base such as a moving average, whereas envelopes encompass the price structure without a clearly defined central focus, perhaps by reference bollinger bands gold highs and lows, or via cyclic analysis.

We'll use the term trading bands to refer to any set of curves that market technicians use to define high or low on a relative basis. The earliest example of trading bands that Bollinger bands gold have been able to uncover comes from Wilfrid Ledoux in He used curves connecting the monthly highs and lows of the Dow Jones Industrial Average as a long-term market-timing tool.

After Ledoux the exact sequence of trading band development gets foggy. In Chester Keltner proposed a trading system, The Day Moving Average Rule, bollinger bands gold, which later became Keltner bands in the hands of market technicians whose names we do not know. Next comes the work of J. Hurst who used cycles to draw envelopes around the price structure, bollinger bands gold. Hurst's work was so elegant that it became a sort of grail with many trying to replicate it, but few succeeding.

In the early '70s percentage bands became very popular, though we have no idea who created them. They were simply a moving average shifted up and down by a user-specified percent. Percentage bands had the decided advantage of being easy to deploy by hand. Arthur Merrill suggested multiply and dividing by one plus the desired percentage. When I started using trading bands percentage bands were the most popular bands by far.

Along the way we got another fine example of envelopes, Donchian bands, which consist of the highest high and lowest low of the immediately prior n-days. Over the years there have been many variations on those ideas, some of which are still in use. Today the most popular approaches to trading bands are Donchian, bollinger bands gold, Keltner, Percentage and, of course, Bollinger Bands.

Percentage bands are fixed, they do not adapt to changing market conditions; Donchian bands use recent highs and lows and Keltner bands use Average True Range as adaptive bollinger bands gold. Bollinger Bands use standard deviation to adapt to changing market conditions and thereby hangs a tale. When I became active in the markets on a full time basis in I was mainly bollinger bands gold in options and technical analysis. Information on both was hard to obtain in those days but I persisted; with the help of an early microcomputer I was able to make some progress.

A touch of the upper band by price that was not confirmed by strength in the oscillator was a sell setup and a similarly unconfirmed tag of the lower band was a buy setup. The problem with that approach was that percentage bands needed to be adjusted over time to keep them germane to the price structure and the adjustment process let emotions into the analytical process.

Bollinger bands gold you were bullish, you had a natural tendency to draw the bands so they presented a bullish picture, if you were bearish the natural result was bollinger bands gold picture with a bearish bias. This was clearly a problem. We tried reset rules like lookbacks with some success, but what we really needed was an adaptive mechanism, bollinger bands gold.

I was trading options at the time and had built some volatility models in an early spreadsheet program called SuperCalc. One day I copied a volatility formula down a column of data and noticed that volatility was changing over time.

Seeing that, I wondered if volatility couldn't be used to set the width of trading bands. That idea may seem obvious now, but at the time it was a leap of bollinger bands gold. At that time volatility was thought to be a static quantity, a property of a security, and that if it changed at all, it did so only in a very long-term sense, over the life of a company for example. Today we know the volatility is a dynamic quantity, indeed very dynamic. After some experimentation I settled on the formulation we know today, an n period moving average with bands drawn above and below at intervals determined by a multiple of standard deviation We use the population calculation for standard deviation.

The defaults today are the same as they were 35 years ago, 20 periods for the moving average with the bands set at plus and minus two standard deviations of the same data used for the average. I had presented a chart showing an unconfirmed tag of my upper band and explained that the first down day would generate a sell signal. They are curves drawn in and around the price structure usually consisting of a moving average the middle bandan upper band, bollinger bands gold, and a lower band that answer the question as to whether prices are high or low on a relative basis.

Bollinger Bollinger bands gold work best when the middle band is chosen to reflect the intermediate-term trend, so that trend information is combined with relative price level data. The first down day was the sell signal and entry.

We have come a long way since the bands were developed. Today we have a suite of Bollinger Bands tools with at least one tool in every major technical analysis indicator category.

And with more on the way; wherever you are, whatever you trade, Bollinger Bands and the related tools will be there for you.


Day Trading With Bollinger Bands


bollinger bands gold


Bollinger Bands are a technical analysis tool, specifically they are a type of trading band or envelope. Trading bands and envelopes serve the same purpose, they provide relative definitions of high and low that can be used to create rigorous trading approaches, in pattern. Bollinger bands have three lines, an upper, middle and lower. The middle line is a moving average of prices; the parameters of the moving average are chosen by the trader. There is no magic moving average number, so the trader can set the moving average so it . Jul 27,  · A Bollinger Band is a chart indicator that can be used to measure the volatility of a market. Let’s explain what Bollinger Bands are and how they can be used to enhance your online gold trading: An Introduction to Bollinger Bands. Bollinger Bands were created by investment manager John Bollinger in the early s.