signals based on price touching the bands

signals based on price touching the bands

Bollinger Bands Tutorial

Chaiken innovation
Trading bands are lines plotted in and around the price structure to form an envelope to the effect of prices near the edges of the envelope that we are interested They are one of the most powerful concepts available to the technically based investor, but they are not, as is commonly believed, give absolute buy and sell signals based on price touching the bands. What they do is answer the perennial question of whether prices are high or low on a relative basis. Armed with this information, an intelligent investor can buy and sell decisions by using indicators to confirm price action.
But before we begin, we need a definition of what works. Trading bands are lines plotted in and around the price structure to form an "envelope." It is the action of prices near the edges of the envelope that we are particularly interested in the earliest reference to trading bands that are found in technical literature is in profit Magic of Stock Transaction Timing; author M approach. Hurst is on a drawing of smoothed envelopes around price to aid in cycle identification.