Because standard deviation is a measure of volatility, Bollinger Bands® adjust themselves to the market conditions. When the markets become more volatile, the bands widen (move further away from the average), and during less volatile periods, the bands contract (move closer to the average). The tightening of the bands is often used by technical traders as an early indication that the volatility is about to increase sharply.
-
- There are more pages in this discussion • 55 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Add to My Watchlist
What is My Watchlist?
