RE: VOLATILITY

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VOLATILITY

in blurt •  2 months ago 

Thanks for this summary of bollinger bands.

"When the price touches or moves outside these bands, it can signal overbought or oversold conditions, hinting at a potential price reversal."

I understand that, and have seen it in action for many years. This is how bollinger bands work. If the price gets too low, they tell you it could be time to buy, because the price is likely to recover. If the price gets too high, they tell you it could be time to sell, because the price is likely to correct.

"Imagine.. the price repeatedly hits the upper band. This suggests a strong uptrend, making it a potential buying opportunity. Conversely, if the price lingers near the lower band, it could indicate an oversold condition, possibly signaling it's time to sell."

This quote seems to suggest the opposite of the first one. It seems to be saying that if the price moves outside the bands, it can signal another push in the same direction. Can you explain?

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You are correct, in the process of typing what I was thinking and typing were two different things. Thanks for the correction