**1.** Bollinger Bands help traders to determine relative high prices and low prices in the chart. By definition, high prices will be on the upper band and low prices will be on the lower band of the Bollinger Bands indicator.

**2.** The above relative definition can be used to compare with price action or indicator action to help traders make buying and selling decisions.

**3**. The right indicators can be built on momentum, volume, market position, open volume (OI), Intermarket data, etc.

**4.** If using two or more technical indicators, traders should not use indicators that have directly related properties. For example, two trend indicators or two oscillators should not be used to analyze a chart.

**5.** Bollinger Bands can be used to identify candlestick patterns or price patterns such as M / W formation or to recognize momentum changes, etc.

**6. **The upper and lower bands are not the place where traders should identify buy and sell signals.

**7.** In a trending market, the price can go up the upper band and down the lower band.

**8.** The closing price outside the band is a sign that the price continues to move in the old direction, not a reversal signal. (This feature is the basis for many powerful breakout trading systems.)

**9.** The indicator's default parameters such as MA20 and 2 times the standard deviation for the width of the bands are just the default. Actual specifications may vary depending on the market you trade.

**10.** Moving average (mid-band) is a signal of trend change when price crosses, not a signal of a transaction.

**11.** If you change the period of the Moving Average, the width of the BB should be changed accordingly. For example, the standard deviation will increase from 2 to 2.1 if you change the MA 20 to MA 50. Similarly, when the cycle of the MA 20 is reduced to MA 10, the standard deviation of the BB should be adjusted to 1.9...

**12. **Traditional Bollinger Bands are based on the SMA. This is because this mean is used to calculate the standard deviation and we need to be consistent on this point.

**13.** Bollinger Bands based on the EMA will eliminate sudden changes in bandwidth. So the standard deviation needs to be calculated differently.

**14.** There are no statistical assumptions based on the use of the standard deviation calculation for Bollinger Bands. The distribution of stock prices do not follow the normal distribution and the sample size in most of the Bollinger Bands data is too small for statistical significance.

**15.** The% b metric tells us the position of the current price relative to the two Bollinger Bands. Follow the formula below:

In which: C is the current price, LB is the lower band value, UB is the upper band value.

**16. **% b has many benefits, it helps traders identify the divergence signals, identify patterns, ...

**17.** Other indicators can be standardized against% b, by constructing the Bollinger Band for the indicator itself, then calculating the% B value of the indicator.

**18.** BandWidth tells us the width of the Bollinger Bands. Using the default parameters, BandWidth is four times the standard deviation.

**19.** BandWidth has many benefits. Its most common benefit is identifying the region of the spasm, but it's also helpful in identifying trend changes ...

**20.** Bollinger Bands can be used in most other markets such as stocks, indices, foreign exchange, commodities, futures, options, and bonds.

**21.** Bollinger Bands can be used on many different timeframes such as M5, H1, H4, D1, W1, ... It is important that this information are large enough to show a clear picture of price action.

**22.** Bollinger Bands do not give regular trading signals, but instead, help to identify odds in favor of traders.

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