Glenn Wilson - Bollinger Band Trading

Bollinger Band Trading

How to Build a Profitable Trading System Using Bollinger Bands

Table Of Contents

Introduction

Chapter 1 Envelopes

Chapter 2 What Are Bollinger Bands?

Chapter 3 Key Features of Bollinger Bands

Chapter 4 Components of the Bollinger Band

Chapter 5 Buy Signals

Chapter 6 Sell Signals

Chapter 7 Bollinger Band Breakouts

Chapter 8 Identifying Trends Using Bollinger Bands

Chapter 9 Bollinger Bands and Relative Strength Index

What Is Relative Strength Index?

How to Use Bollinger Bands with Relative Strength Index as a Trading System

Chapter 10 Rules for Bollinger Band Trading

Chapter 11 Final Notes

Conclusion

Introduction

I want to thank you very much and congratulate you for downloading the book , Bollinger Band TradingHow to Build a Profitable Trading System Using Bollinger Bands.

In this book, youll discover the power of Bollinger Bands. Youll learn what they are and exactly how to use them to identify buy signals, sell signals and trends.

Plus, youll learn step-by-step how to use Bollinger Bands in conju nction with other indicators (such as RSI) to build a complete profitable trading system.

Thanks again for downloading this book, I hope you enjoy it!

Legal

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Risk Disclaimer

Trading in any financial market involves substantial risk of loss and is not suitable for all investors. Any style of trading in any market condition is extremely risky and can result in substantial financial losses in a very short period of time. There is considerable exposure to risk in any transaction including but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a trade.

Trading is a challenging and potentially profitable opportunity for those who are educated and experienced in trading. Before deciding to participate in the markets, you should carefully consider your objectives, level of experience and risk appetite. Most importantly, do NOT invest money you cannot afford to lose. Objective, experience, risk of loss, leverage, creditworthiness, limited regulatory protection, market volatility that may substantially affect the price or liquidity of a trade, communication failure, etc. could put you at risk for the loss of some or all of your capital and/or assets. The possibility exists that you could sustain a total loss of initial funds and be required to deposit additional funds to maintain your position.

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Chapter 1 Envelopes

An envelope is defined as something that comprises of two moving averages on either sides of the trading range. One of the moving averages is shifted upward and the other one is shifted downward forming an envelope within which the prices generally trade. Envelopes define the upper and lower ranges of a financial instruments normal trading range. A sell signal is generally said to be generated when the prices touch the upper end of the trading range and a buy signal is said to be generated once the prices touch the lower end of the envelope. The percentage shifts for the security completely depends on the volatile nature of the security, the more volatile the security the higher the percentage movements.

As stated earlier envelopes are trading bands within which the movements of the security are recorded and traders generally use these price movements to understand reversal patterns and entering or exiting certain trades with other indicators like the MACD, RSI used as confirmation signals. They are considered to be one of the most useful technical tools available to technical analysts, but should not be used as the Holy Grail for entry and exit just based on the price touching either sides of the band. One thing that traders need to keep in mind is the fact that these are not absolute signals but help in answering questions regarding whether the prices are high or low. Armed with this information, an intelligent investor can make buy and sell decisions by using indicators to confirm price action.