2/20/2018. It has made the chart reading easy and the signal reading even easier through its less complicated chart demonstration. Notice how leading up to the morning gap the bands were extremely tight. Trading Range Now, looking at this chart, I feel a sense of boredom coming over. One of the first indicators I put to the test was Bollinger Bands. Using the standard bollinger band setting for this strategy, the lines are: Top line is 2 standard deviations from the middle line to the upside. You will then look for a price action setup that shows price has a probability of travelling back to the upside. .
For the riskier traders, you can jump in before the break and capture all of the gains. This is just another example of why it's important to pair Bollinger Bands with other indicators and not use it as a standalone tool. This is where the bands expose my trading flaw. Case in point, the settings of the bands. Conclusion These are but a few of the great methods for trading with bands. Lower line is 2 standard deviations to the downside from the moving average.