The Bollinger bands, created by John Bollinger in the eighties, measures the volatility of the price through the deviation of two bands, an upper and lower band, from the moving average.

The upper and lower lines shrink when the price barely changes during a specific time frame. However, if there is high volatility, both two lines widen to capture these volatility levels.

This indicator has different applications. Among them, traders frequently use the upper and lower bands to carry out their strategy.

The lower band is used for the buying strategy. Once the price has broken it, the indicator suggests that the likelihood of the price retracing or initiating an upward trend is high. On the other hand, the upper band will help you to pinpoint sell or short points.


What strategies does Bottrex provide for this indicator?

  • Default: When the price touches, exceeding and leaving the lower band can mean an entry. To reinforce the robot, it checks the currency price in the previous candles was close to the lower band. Note: For sales strategies the same concept is used, but inverted.
  • Crossing the SMA: When the price touches and exceeds the middle band it can mean an entry. Further checks are made to find out if the currency price in the previous candles was below the average band. Note: For sales strategies the same concept is used, but inverted.
  • Above the Upper Band: When the price touches and exceeds the upper band it can result in an out of position.
  • Below the Lower Band: When the mini touches and exceeds the lower band and the current price is below the middle band it may mean an entry.
  • Below Middle Band: When the current price is below the middle band it may mean an entry.
  • Above the Middle Band: When the current price is above the middle band it may mean an entry.