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--- trading_strategies:bollinger_band_squeeze [2023/09/06 21:20]
jayanthi
+++ trading_strategies:bollinger_band_squeeze [2023/09/06 21:22]
jayanthi [Bollinger Band Squeeze FAQs]
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   and [[[Upper BB (20,2) - Lower BB (20,2)] / Close ] < .04]
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+===== Bollinger Band Squeeze FAQs =====
+==== What is the Bollinger Band Squeeze? ====
+The Bollinger Band Squeeze is a trading strategy that identifies periods when the Bollinger Bands narrow due to low volatility, indicating potential significant price movements in the near future.
+==== What happens after a Bollinger Band Squeeze? ====
+According to John Bollinger, after periods of low volatility (and a squeeze), a subsequent band break signals the start of a significant price move, either upwards (breaking the upper band) or downwards (breaking the lower band).
+==== Is the Bollinger Band Squeeze a directional strategy? ====
+No, the Bollinger Band Squeeze itself does not provide directional clues. It only indicates a pending volatility expansion. Other technical analysis tools are needed to determine the potential direction of the breakout.
+==== How can traders confirm Bollinger Band breaks? ====
+Breaks can be confirmed using basic chart analysis, such as observing a break above a known resistance or below a support level. Unconfirmed band breaks are more prone to failure.
+==== Are there other indicators that can be used alongside the Bollinger Band Squeeze? ====
+Yes, volume-based indicators like the Accumulation Distribution Line, Chaikin Money Flow, Money Flow Index, or On Balance Volume can be beneficial. These can help determine signs of buying or selling pressure within the consolidation.