The Advanced Bollinger Bands (ABB) is a trend following indicator that can help you identify accurate buying and selling zones while investing. Unlike regular bands, this indicator plots dynamic trend lines alongside oversold and overbought areas so you can take advantage of the trend.
It can be very useful in terms of knowing when to follow the trend and knowing when to change your position accordingly. This ensures that you’re going to get the best opportunity for both types of trading at all times.
The Advanced Bollinger Bands indicator is useful for trading on a Metatrader 4 platform and is useful for trading on futures, metals, energy, cryptocurrency, or forex.
Notice on the chart how there are green markers above the bands and red bars bellow. Green indicates a buy zone while red shows a sell. You might want to look out for signs of movement in one of these areas if you’re hunting for trends to follow once your trade is opened.
The price was originally being held down in the red zone, indicating a downtrend market. However, it entered the buy zone but was rejected by the sellers at higher Bollinger bands. Later, the price breaks the mid-band and triggers a sell entry – assuming that the market will resume its recent bearish rally.
We’ll place our stop-loss on the higher BB (Bollinger Band) and sell short. We’ll hold our sell positions until the price breaks through the mid-band. Alternatively, you can go for a manual exit if the trade already reaches your targeted ratio of risk to reward.
Consider a bullish breakout at the mid-band during an uptrend market condition. To set the stoploss, go below the lower bollinger band and hold there until your desired position is in the selling zone.
The advanced bollinger bands can be a simple way of checking the market trends and reading between the lines. Besides identifying market opportunities, it also helps measure volatility levels and predicts where to put stop-loses and take-profits. It even tells you where to buy & sell for the highest profit potential.