How to Trade Forex With Bollinger Band Indicator

Bollinger Bands is a chart indicator which is developed by a person named John Bollinger.

Hence the name Bollinger bands.

It is a indicator that is used to calculate the volatility of the market.

In other words, this indicator has the ability to tell traders if the market is quiet or loud.

When the market is loud, the Bollinger band expands and vice versa.

As price moves, you will see the band expand as shown in the image below.

Basically, that is it about this indicator.

The most important thing for a trader to know about an indicator is what the indicator does.

Of course, there are complicated calculations and formulas behind the working operation of the Bollinger Band but ultimately, you just need to know what it does.

The whole idea behind the Bollinger band is that price will move within the band and most of the time, the price will tend to return to the middle of the bands.

So, you can actually tell where the price would be moving next right?

Based on the image above, the price touch the top of the band.

In the image below, the price bounces back and heads towards the middle of the band.

If you were to enter a trade at the top of the band, you would have gotten some profit from your trade.

The Bollinger Bands can be regarded as a dynamic support and resistance level.

The bands tend to be stronger with the higher time frames because there is less noise in the market.

Most traders like to use this indicator in a ranging market when there is no clear uptrend or downtrends.

Nevertheless, Bollinger bands can also be used by traders when there is a trend in the market.

Here is how it works.

The bands will squeeze together like in the image below and a breakout is waiting to occur.

If the candles start to break out of the top of the band, the price will tend to pull away going up.

If it breaks out the band below, the price will continue to drop.

Basically, that is how forex traders are able to use the Bollinger bands in their trading strategy.

So go ahead and test it out with the trading strategy that you have.

It might be of help.

If you already have a sound strategy in place, just treat this as extra knowledge.

happy trading, Yours sincerely,




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