Bollinger Band Squeeze Break Out Strategy is a well known strategy for short term trader to get constant profit by trading. Before moving to Bollinger Band Squeeze Break Out Strategy, I have already published GFS strategy of Stock Market. You can check out to know GFS rule with RSI indicator.
Hey, are you facing loss in stock market in recent times? or facing issues with your stocks? Most of the beginner investors of stock market or even experienced investors face loss in stock market. In Most of the cases is due to lack of knowledge about trading indicator like bollinger band or RSI and after losing stocks you might feeling little less motivated or want to quit the stock market.
The person who gains from their slip-ups will win the market certainly however the person who doesn’t comprehend the mix-ups won’t gain from his encounters. I was also facing huge losses in stock market but when I started to learn about the mistake, I realized that I have not searched anything about the company and made the decision based on my friend saying. I contributed beyond what I could bear to lose. The worst part that I had no idea about trading indicator strategy like bollinger band squeeze break out strategy for the investment and lose all the capital.
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Many new traders become confused in trading when different indicators show different analysis. At that moment the confused can be reduced by Bollinger Band Strategy. We can trade or analyze market through Bollinger Band Squeeze Break Out Strategy.
What is Bollinger Band And How It is Worked:
Bollinger bands are invented by John Bollinger and it consists of three lines. The three lines are explained below:
- Upper Band – Middle band plus 2 standard deviation
- Lower Band – Middle band minus 2 standard deviation
- Middle Band – Twenty Period Moving Average
Bollinger Band helps you to identify overbought or oversold areas and identify the volatility of the market. Now the question is what is standard deviation?
So, it simply measures how far you are away from the average.
In simple words, –
If the price is near the upper Bollinger Band, it’s considered “expensive” because it is 2 standard deviation above the average (the 20-period moving average).
And if the is price near the lower Bollinger Band, it’s considered “cheap” because it’s 2 standard deviation below the average.
Bollinger Band Squeeze Break Out Strategy:
Here, we need to understand volatility of the market. Market is always moving from high volatile to low volatile.
If you are new trader, then it is difficult to you to get understand of the market volatility.
So, this is where a Bollinger Bands strategy can help because it contracts or squeeze when volatility is low and expands when volatility is high.
Bollinger Band and RSI Combo:
A very few traders known the power of bollinger band and RSI combo. When you see that the graph is showing bollinger band sqeeze break out as well as it also shows the RSI is above 60 or moving upward to 60, it is a Bullish Signal. You can buy the stock at that point.
Buying Price – Above high
Stop Loss – Below Low
Target – Previous Candle High
You can check the below image to understand the bollinger band squeeze break out startegy with RSI.
Similarly, when the RSI is below 40 or moving downward to 40, it’s a strong bearish signal.
That’ all about bollinger band squeeze break out strategy. Hope you understand the rule and you can implement in the short term trading.
Here Rayner write a detail article about Bollinger Band Squeeze Break Out Strategy, you can check to learn more details.
This is time to implement bollinger band squeeze break out strategy to get the best profit from the market. Remember, knowledge is nothing without implementation. So implement and analyze market always so that you can maximize your profit from the market. Execution is the first step to success. Investing or trading a practical field so implement right now!
If you have learned a new strategy, don’t forget to share the content with all traders. If you are value investor, then 2023 is the biggest opportunity for you. You can invest on IT sector and here is why?
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