Bollinger Bands Indicator Bulge and Squeeze Technical Analysis

The CFD Trading Bollinger Bands are self adjusting which means the bands widen and narrow depending on cfds price volatility.

Standard Deviation is the statistical measure of the cfds price volatility used to calculate the widening or narrowing of the cfd Bollinger bands. Standard deviation will be higher when prices are changing significantly and lower when the market prices are calmer.

• When cfds price volatility is high the Bollinger Bands widen.
• When cfds price volatility is low the Bollinger Bands narrows.

How to CFD Trade Bollinger Bands Squeeze

Narrowing of cfd Bollinger Bands is a sign of cfds price consolidation and is known as the Bollinger band squeeze.

When the Bollinger Bands indicator display narrow standard deviation it is usually a time of cfds price consolidation, and it is a signal that there will be a price breakout and it shows traders are adjusting their trade positions for a new move. Also, the longer the prices stay within the narrow bands the greater the chance of a cfds price breakout.

Bollinger Squeeze - The Bollinger Bands Squeeze - How to CFD Trade Bollinger Bands Squeeze

How to CFD Trade Bollinger Bands Bulge

The widening of Bollinger Bands is a sign of a price breakout and is known as the Bollinger Bands Bulge.

Bollinger Bands that are far apart can serve as a signal that a trend reversal is approaching. In the Bollinger bands indicator example shown below, the cfd Bollinger bands get very wide as a result of high cfds price volatility on the down swing. The trend reverses as prices reach an extreme level according to statistics & the theory of normal distribution. The "bulge" predicts the change to a cfds trading downward trading trend.

Bollinger Bulge - The Bollinger Bulge - How to CFD Trade Bollinger Band Bulge