Bollinger Bands Oil Trading Price Action in Ranging Oil Trading Markets
Bollinger Bands Oil Technical Indicator is also used to identify periods when a oil market oil trend is overextended. The guidelines below are considered when applying this oil indicator to a sideways crude oil trend.
Bollinger Bands Oil Technical Indicator is very important because it is used to give oil signals that a crude oil price breakout might be upcoming.
During a oil trending market these techniques don't hold, this only holds as long as Bollinger Bands are pointing sideways.
- If the crude oil market price touches the upper band it can be considered overextended on the upside - overbought.
- If the crude oil market price touches the lower band the crude crude oil price can be considered overextended on the bottom side – oversold.
One of the uses of Oil Trading Bollinger Band indicator is to use the above overbought and oversold oil guidelines to establish buy & sell targets during a ranging crude oil market.
- If crude crude oil price has bounced off the lower band crossed the center-line moving average then the upper band can be used a sell level.
- If crude crude oil price bounces down off the upper band crosses below center moving average the lower band can be used as a buy level.
++Trading Bollinger Bands in Ranging Oil Markets – Bollinger Bands Oil Trading Strategy
In the above ranging oil market the instances when the crude crude oil trading price hits the upper or lower bands can be used as profit targets for long/short oil trade positions.
Oil trades can be opened when the oil market hits the upper resistance level or lower support level. A stop loss oil order should be placed a few pips above or below depending on the oil trade opened, just in case the crude crude oil price action breaks-out of the range within these Bollinger bands.
