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What is Bollinger Bounce?

Updated: Dec 29, 2020

The very first thing is Bollinger Bands is that which lets you know the "price tends to return to the middle of the bands".

Once you will look at chart 1, you will understand whether it's moving upwards or downwards.

The reason these bounces occur is that the BB (Bollinger Bands) act like dynamic support and resistance levels which represent the chart clearly and you get a clear view, whether it's moving in which direction. The chart will show you the bigger trends based on the time interval between "Time Exis" & "Time over the dynamic view" and this chart will give you a dynamic, strong view. Most traders want to trade this approach when prices trendless based on static data.

Two important things,

You should avoid placing any trade the Bollinger Bounce when the bands are expanding because this usually means the price is not moving within a range but in a trend.

On the other hand, experienced traders thrive on these bounces, and this strategy is best used when the market is ranging and there is no clear trend, because it may go higher high or lower low.

It's the best practice to understand Bollinger Bounce when the market is volatile and trending actively.

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