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Bollinger Bands Stock Price Action in Ranging Stock Trading Markets

Bollinger Bands Stock Indicator is also used to identify periods when a stock market trend is overextended. The guidelines below are considered when applying this stock indicator to a sideways stocks trend.


Bollinger Bands Stock Indicator is very important because it is used to give stock trading signals that a stock price breakout may be upcoming.


During a stock trending market these techniques do not hold, this only holds as long as Bollinger Bands are pointing sideways.


  • If the stocks trading market stocks price touches the upper band it can be considered overextended on the upside - overbought.

  • If the stocks trading market stocks price touches the lower band the stocks price can be considered overextended on the bottom side - oversold.


One of the uses of Stock Bollinger Bands indicator is to use the above overbought and oversold stock trading guidelines to establish buy and sell targets during a ranging stocks market.


  • If stocks price has bounced off the lower band crossed the center-line moving average then the upper band can be used a sell level.

  • If stocks price bounces down off the upper band crosses below the center moving average the lower band can be used as a buy level.

Bollinger Bands Stock Trading Strategy

Trading Bollinger Bands in Ranging Stock Trading Markets - Bollinger Bands Stock Trading Strategy



In the above ranging stock market the instances when the stocks price hits the upper or lower bands can be used as profit targets for long/short stock trade positions.


Stock trades can be opened when the stocks trading market hits the upper resistance level or lower support level. A stop loss stock order should be placed a few pips above or below depending on the stock trade opened, just in case the stocks price action breaks out of the range within these Bollinger bands.

 

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