What is the bollinger bands formula used in cryptocurrency trading?

1 answers

• Dec 28, 2021 · 3 years ago
  The bollinger bands formula used in cryptocurrency trading is a popular tool among traders. It helps to identify price levels at which a cryptocurrency is overbought or oversold. The formula consists of a moving average and two standard deviations. The upper band is calculated by adding two standard deviations to the moving average, while the lower band is calculated by subtracting two standard deviations from the moving average. The middle band represents the moving average itself. Bollinger bands are used to gauge volatility and potential price reversals. When the price touches the upper band, it may indicate that the cryptocurrency is overbought and a sell signal. On the other hand, when the price touches the lower band, it may indicate that the cryptocurrency is oversold and a buy signal. However, it's important to note that bollinger bands should not be used in isolation and should be used in conjunction with other technical analysis tools and indicators for more accurate trading decisions.
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