Bollinger Band Scans

Stepping into this guide means stepping into a deep knowledge of the Bollinger Band Indicator. Here, we can learn what is BB, how does Bollinger Band scan works, How to use the Bollinger Band Screener, and many more.

Initially, understanding Bollinger Band Scans is very important to be connective with the next trading process. It simply identifies stocks that are approaching above or below the Upper Band and Lower Band. Get the complete data on the same from below.  

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Symbol LTP Upper Band Lower Band Scan Description

Bollinger Bands Stock Screener is also known for technical indicators while trading. Does miracles with the features included in the BB Scans.

Traders who are looking for a tool that determines the trends and acts as an indicator of volatility can stop here and use this Bollinger Bands Scanner. Now, refer to the definition of Bollinger Bands and How to use Bollinger Bands in trading in a comprehensive manner.  

What are Bollinger Bands? 

Bollinger Bands indicator was first developed by analyst John Bollinger in the 1980s. This is treated as a popular technical indicator during trading.

In BB, a basic set of bands is made of three lines: a simple moving average, a line that’s two standard deviations of the price below the moving average. and a line that’s two standard variations of the price above the moving average.  

Who Invented The Bollinger Bands? 

Bollinger Bands indicator was first developed by analyst John Bollinger in the 1980s. This is treated as a popular technical indicator during trading. In BB, a basic set of bands is made of three lines called upper band, middle band, and lower band.

What do BB's three lines represent?

  • Consisted Bollinger Bands three lines are explained as follows: 
  • The upper band is the two standard deviations of the price above the moving average. 
  • The middle band represents a simple moving average. 
  • The lower band is a line that’s two standard deviations of the price below the moving average. 

The upper and lower lines are represented as (+1, -1) and the width of the bands can be utilized to indicate the market volatility. When the BB pulls and bands are wider, it denotes volatility increases and a great chance to trade. Conversely, when the BB drops and they are narrow, the volatility decreases and potentially fewer trading possibilities.

Formulas To Calculate Bollinger Bands in Trading

Below are the simplified formulas of Bollinger Bands that are used during trading: 

  • Upper Band = 20-day SMA + (20-day standard deviation of price x 2) 
  • Middle Band = 20-day simple moving average (SMA)
  • Lower Band = 20-day SMA - (20-day standard deviation of price x 2)

How Do You Use Bollinger Bands In Trading Using Paisaalgo's BB Screener?

The following steps or points will surely teach you how to use the Bollinger Bands strategy while trading and at last you will get the stocks that are near the lower band or upper band with this tool:

  • If you see the stock price is close to the lower band, it may or may not break the lower band.
    • When it breaks, go for a selling opportunity. 
    • When it doesn't break, go for a buying opportunity. 
  • If you see the stock price is close to the upper band, it may move up or down. 
    • When it breaks the upper band, go for the long position.
    • When it doesn't break, go for the short position
  • When crossed BB Upper from Below means grab the option to buy. 
  • Crossed BB Upper from Above, go for the option to sell. 
  • Crossed BB Lower from Below, look for the opportunity to buy.
  • Crossed BB Lower from Above means the chance to sell. 
  • In case the Bollinger Bands squeeze, indicates the market will break out.
  • You can even use the Bollinger bands to grasp the high chance of reversal trades.

Final Thoughts

Bollinger Band Scans is a powerful technical indicator that analyzes stocks that are above or below the Upper BB and Lower BB. Also, it works great with other indicators. More importantly, this paisaalgo.com Bollinger Bands scanner can be created easily for a swing or momentum trading opportunity. 

For more on BB Scans Eod and other EOD Scans like ADX scans, MACD scans, supertrend scans, etc. do click on the available links and also visit our site for the latest trading updates and strategies.