InvestorQ : Why are they called Bollinger Bands? Do they represent a band or a range and how do we trade on these bands?
Riya Dwivedi made post

Why are they called Bollinger Bands? Do they represent a band or a range and how do we trade on these bands?

Answer
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rhea Babu answered.
1 year ago


As the very name suggests, these are bands representing range of values and normally trends are manifested when the Bollinger bands are breached on either side. Let us look at the interpretation in greater detail.

Prices have a tendency to bounce within the bands' envelope, touching one band then moving to the other band. You can use these swings to help identify potential profit targets. For example, if a price bounces off the lower band and then crosses above the moving average, the upper band then becomes the profit target. Price can exceed or hug a band envelope for prolonged periods during strong trends. On divergence with a momentum oscillator, you may want to do additional research to determine if taking additional profits is appropriate for you. A strong trend continuation can be expected when the price moves out of the bands. However, if prices move immediately back inside the band, then the suggested strength is negated.