 Hi in this video, I'm gonna be talking about Bollinger bands and how traders trade the Bollinger band or one of the popular ways That traders trade the Bollinger band indicator now the Bollinger band indicator was created by John Bollinger and is used to measure market volatility was used to measure market volatility So market volatility refers to the amount of activity within the market So a low volatility market will refer to Basically low activity and a high volatility market will refer to a lot of activity So a high an example of a high volatility market is during some sort of news or economic Event so where traders are getting into the market and you know There's a lot of activity going on buying and selling based on the news So the Bollinger band is really centered With the indicator is centered around the moving average 20 period moving average which is the red or burgundy line that you can see and It has two bands an upper band and a lower band and the idea behind it is that price volatility won't really will say won't really but it won't stay outside of the Bands for too long before reverting back to the moving average So you can see here that prices Don't really stay outside of the bands for too long. So they will kind of hug the band They will hug the band, but they won't You know really deviate too far away from the actual Band as you can see prices stay when they do come outside They can the wick comes back in outside comes back in outside comes back in so You will have periods where Prices may come out, but They won't stay out for too long. Now traders will trade the Bollinger band in The main way that traders will trade the Bollinger band is via the Bollinger band bounce. So traders would attempt to Capitalize and buy when prices come into the lower band and sell as Prices come into the upper band now Like all indicators It depends on the market state. So there are some indicators that are Really good for trending markets and there are some indicators that are Used and really well for ranging markets. So the Bollinger band indicator is mainly used for Ranging markets There is a there is a trending market strategy For Bollinger bands, but the main way that traders will use this is just to trade the upper and the lower side Bounces so let's say for example, we have an upper bounce here, right now This level may be used as a level of Supply or resistance So we know that we've got a level here Now when prices do come up to this level here at the top We can see that we are already at a Level where we are getting some sort of rejection before that we had some rejections But there was really no clear level of support and resistance in conjunction with the Bollinger band And as we can see now when prices did come up to here we were touching the Upper band and we were near the upper band We've also got some price action some negative price action bearish and then prices traded down to the mean We can also see again right here Where we have a level of Demand or what traders may call support And we can see that prices when they came back down in We can see that prices actually came out of the band and then put in some bullish price action with this engulfing candle here Again supported by the fact that it was a Bollinger band Bounce and again we have if you extend it across we have another Bounce here back up to the mean bounces back up to the means so We can see a level here Where you have prices come back up You've got a level of resistance and again it's to do with The combination of Bollinger bands and levels of support and resistance So we had this level here prices rejected when prices came back down in prices traders will look to You know by at this area here because you can see that with the Bollinger band We have some confirmation and confirming price action as well This is quite a bullish price action and again We have a level of resistance and prices came back up into this level here We can see prices didn't stay outside for too long before Moving down so Bollinger band bounces Again are really just Traders will trade them Once prices come outside or touch or a near the upper or lower bands together with areas of support and resistance as Buying and selling Opportunities now in this example on the US dollar Swiss Frank pair. We can see Several bounces and opportunities for traders to really enter the market now you have an example here and Prices have been coming down and then prices basically get rejected now We don't know whether this is going to be a level of support but aggressive traders will Try to enter On the first touch and as you can see when prices did come back down into this level It didn't stay outside of the Bollinger band for too long and in fact we put in quite a bullish price action candlestick, so One way traders will get in is they will either get in on a pending order once prices come back into the band So that they can minimize their Their risk so they went when prices go outside of the band and prices come back in They will then put their stop loss below low and potentially get into the upside All what traders will do is they will wait for price to confirm So that's the bullish price action stop below the low and then you have your prices targets as far as profit targets some traders may want to take Targets at the at the mean and some traders will want to extend their targets but Bollinger bands really should be traded with Confluence in mind because it's Again, it really does depend on the state of the market whether the market is trending or Ranging if you don't know what trending or ranging markets are we have a video in the Tutorial section on identifying trends So let's look at some more examples here So we can see actually Wasn't one here. We had one Cell Again to the upside so we had prices basically rejected from here and Then prices as they made their way up into this Bollinger band here prices came outside Prices came back in as prices come back in and close inside candlestick close traders would have either have got in like that or They may have waited for confirming price action. It's quite a negative candle there and Then look to either take profit at the other side of the band if the risk reward obviously meets the criteria and Yeah, so we have another example there We have an example here where prices came out came back in once they closed inside the bands to the upside and it was at a level of Support now confirm support because we had one two three now four touches And again prices come up So you can start to see where Bollinger bands can be very very useful when it comes to predicting reversals in the market as price doesn't necessarily want to stay outside of the bands for very long You can see on this candle wick here to the right you can see prices came out But by the end of the day, they were right back in prices don't stay out for very long So I hope that helps with trading Bollinger bands. If you have any questions, please email me at info at trading 1at.com