There are a lot of tools to assist the trader in assessing the state of the market. A clear analysis of the situation with the help of certain indicators allows you to develop the right strategy. Using one method may not lead to the desired result. John Bollinger, who developed the Bollinger Bands, emphasized that his method should not be used as independent signals for buying and selling. The task of the bands is to ensure the boundaries within which the price analysis should be carried out using independent technical indicators. The bands cover any timeframe and allow the trader to respond quickly to significant market changes, depending on the location of prices in relation to the normal trading range. The three lines that make up the Bollinger Bands show in their graph the extreme short-term value of the asset. By applying only the bands in the implementation of trading decisions, you can build a simple strategy. The overbought area is represented by the upper band at the same time the lower one reflects when the asset is oversold. In the event of a breakthrough of the lower band, a good chance is given of using the oversold condition in its own interests. Active sales that break through the lower bound return the price of the asset to the middle line. Adhering to this scenario, the strategy will try to realize the chance of making a profit. The close of trading below the lower band will be a signal to immediately buy up the shares on the following day. Any strategy is not without flaws, this is not an exception to the rule. The mistake of the strategy in this case is the price movement rate of decline. The situation proceeds according to an unforeseen scenario, the price is not rolled back soon, and there is a risk of significant losses. At the final stage, the strategy often confirms its correctness, but the majority of traders cannot withstand a fall before the correction. To effectively use the above strategy, each trader develops his exit tactics. Any financial market instrument requires certain indicators, suitable only for it, to increase the probability of guessing price movements. The stock market is characterized by a constant movement of assets and you need to have a certain experience and flair for their choice. Only a strong knowledge base allows many traders to stay afloat. In this segment of the market, random people do not survive.

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