Updated: Mar 6
Bollinger Bands are a widely used technical analysis tool that was developed by John Bollinger in the 1980s. They are plotted two standard deviations away from a moving average of a particular asset's price, and they can be used to determine whether an asset's price is overbought or oversold.
But have you heard about a Bollinger Band squeeze?
When the bands are close together, it indicates that the asset is experiencing a period of low volatility, which can often be followed by a period of high volatility. This phenomenon is known as a Bollinger Band squeeze!
In this article, we will discuss how to trade Bollinger Band squeeze breakouts. A Bollinger Band squeeze breakout occurs when the price of an asset breaks out of the range created by the Bollinger Bands after a period of low volatility. These breakouts can be quite rewarding, but they require a certain level of skill and knowledge to execute ideally.
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