I will be discussing on TA tools topic: Bollinger Bands
It's an adaptive trading bands that reflects changes in volatility and provide clearer picture of the true extent of price movement/action.
BB can be used on most financial time series, including equities, forex, stock market and cryptocurrency trading.
There are 5 types of BB
- Constriction BB: A constriction BB talks about volatility decrease of a particular trade or market or price action
Second type of BB is called Bullish Expansion: At this point price will walk up or stick up to the upper BB ( the red line). And note this the Upper BB will expand upward and the lower BB will expand downward
A bullish move up is when upper BB (red) heads up or north and the lower bands(yellow) heads up or north as well. So in a nutshell,what this depicts about volatility is that the price action will not be extreme and lengthy as bearish expansion. And the volatility is not at is peak as bullish expansion
Number 5 type of BB is called Bearish move down which is equal to the opposite of Bullish move up. For everything that happens for bullish move up reverse is the case for bearish move down