Bollinger Bands Message Board

[Briansnj]

I have read and watched trader training materials from respected traders. In many instances, they talk about how important the flare of the upper/lower bands are to signal to you an entry. I am being very general in my statement so pardon me for incorrectness in terminology.

Many recommend the breakout signal is best when the bands are narrow (squeeze play) and begin to flare/trumpet open. The upper band angling upward and lower band angling downward.

1 - Does Mr. Bollinger feel this is correct and if so, does this apply to Forex? I have only seen these discussions from the stock market perspective.



In my pursuit of a friendly KISS simple intraday Forex system with Bollinger Bands, I have read it is recommended to use 3, 3.5 and/or 4 SDs for 30, 15 and 5 minute time frames. The theory is Forex is very fast and the time frames are fast and if the pairs are very volatile/fast...you need to slow the BBs down to make the signals more accurate.

2 - Does Mr. Bollinger agree with that from the Forex perspective?


I know some of these questions of mine can seem silly but there is so much about BBs and stocks, comms, etc and so little material for BBs and Forex and no Forex focused materials from Mr. Bollinger himself. That is why I ask.

[Briansnj]

Just to add more of my logic -

I have read Mr. Bollinger's book twice but that was a few months ago to get me started. Need to read it again for growth.

I just have strong suspicions that the relationship of the bands must be important. And I also wonder as to the overlooked power of the middle band in relation to the convergence or divergence or parallel of the outer bands.

I hope that made sense.

[bbands]

I find it helpful to try and understand the motive force behind any pattern. A “flare” -- the upper band rising while the lower band falls -- can only be caused by expanding volatility. You can check this by observing the action of the BandWidth indicator. For a flare to occur the rate of change of volatility has to be greater than the rate of change of the middle band. So, yes, a flare is exactly what you would like to see in the wake of a Squeeze and breakout.

As for very-wide bands for forex, that depends on what you are using the bands for. Why not visit our forex site, BBForex, and have a look for yourself. There you can try bands of any length and width on a wide variety of forex data of the periodicity of your choice. (Very wide Bollinger bands might be justified for certain types of trading approaches that try to identify extremes.)

Good trading,

jab