How NOT to trade the Bollinger Bands

When price is touching the upper Bollinger Band, it is 2 standard deviations above the 20-period moving average and is therefore considered “expensive”. However, it is not a good idea to fight an uptrend just because price seems “expensive”. Instead, you can BUY a BULL market when it temporarily trades as the LOWER Bollinger Band and there is a confluence of other support signs.

When price is touching the lower Bollinger Band, it is 2 standard deviation below the 20-period moving average and is therefore considered “cheap”. However, it is not a good idea to fight a downtrend just because price seems “cheap”. Instead, you can SELL a BEAR market when it temporarily trades as the HIGHER Bollinger Band and there is a confluence of other resistance signs.