When you decided to enter the forex market, it is better to know about the double Bollinger bands or DBB. It is known as the technical indicator which is used to measure the price range and volatility of a currency (or stocks).
This strategy got the name from its founder, John Bollinger. He is actually a financial expert from the USA. He started to develop this strategy in 1980. Besides used as a measurement indicator, it is also used to determine the price direction.
Some traders said that this method also helps them to know the oversold and overbought situation. There are more things that you need to know about this thing. You are in the right place since the detailed information will be listed below.
Three Different Types to Know
In fact, these double Bollinger bands consist of three different indicator lines that follow the price movement in the market. Those are like the Upper, Middle, and Lower bands. From those three things, the main common ones are the Upper and Lower.
It is because those lines have essential roles in observing the price movement. It is counted from the up and down volatility value. On the other side, the middle band is only a line that limits the Upper and Lower sectors.
That Middle part is also known as the simple moving average or SMA. The question now is how to read these double Bollinger bands. The first thing to do knows the deviation standard term. It is a tool to measure price volatility.
By connecting the price range and its average moving, it means the volatility will be higher as well. The profit will increase too and the same thing will happen in the deviation standard. Usually, the deviation standard has been set default.
The Pros and Cons
As one of the indicators that give the signal, the double Bollinger bands also have some pros and cons. That is why; traders need to consider the use of this type. Being more detailed is essential. The pros of this strategy are so varied.
Usually, it could detect the end of a trend. You are able to detect the sideways as well where the market condition is stable in certain boundaries. It is also used as an indication of overbought and oversold. Seeing several patterns are also able to see.
Those patterns are like the double top, bottom, and momentum change. However, these Bollinger bands also have several cons. It is lagging and prices can move beyond the sector. The upper band is not always becoming the highest line.
It is better to learn more about these double Bollinger bands if you want to use this strategy. Usually, it is used in a trending condition. However, traders can also apply it in ranging or sideways situation. The base principle is approaching the trend.
Two Keys of Configuration
If you really want to learn and apply this trading plan, there are two different configuration keys to use. First, set the DBB indicator parameter in default. The period value is 20, deviations2, apply to close, and shift 0. Join the best forex broker too.
The second DBB setting is 20 for the period value, deviation 1, apply to close, and shift 0. Whatever your strategy is, it is recommended to join the didimax forex broker. This one of the most professional brokers provides tons of goodness.
Those are included fast access, interesting prices, security, cross-platform ability, direct market access system, and so on. Find out more about the services it’s offered and join it right now. You could do the double Bollinger bands strategy and others smoothly.
