Users need to remember that tags of the bands are just that, tags not signals. A tag of the upper Bollinger Band is NOT in-and-of-itself a sell signal. A tag of the lower Bollinger Band is NOT in-and-of-itself a buy signal. Price can, and does, walk up the upper Bollinger Band and down the lower Bollinger Band.
Manhattan Beach, CA (PRWEB) July 29, 2009
Bollinger Bands are one of the most widely used technical analysis tools by traders worldwide. John Bollinger's book, "Bollinger on Bollinger Bands" has been translated into seven languages and Bollinger Bands are available on almost all charting platforms. 25 years after they were developed their popularity is still growing.
In 1983 John Bollinger created Bollinger Bands. Shortly thereafter he introduced his new technical analysis tool to the public on the Financial News Network where he was the Chief Market Analyst. Today turn to any website or financial software that includes charts with technical analysis and Bollinger Bands are featured. To many savvy traders charts look incomplete without them. Why has this analytical tool become so popular? The simple reason is that Bollinger Bands work!
To quote a user "One tool that stands out in the crowd is Bollinger Bands. Like every ingenious invention it looks simple, but, well . . . it is ingenious!"
Bollinger Bands can be applied to virtually any financial market or security. When asked what he considers the key to Bollinger Bands, Bollinger says "The bands provide a relative definition of whether prices are high and low. That relative definition can be used to compare price action and indicator action to arrive at rigorous buy and sell decisions.
While trading warrants and options in the late 1970s and early '80s, Bollinger focused on volatility as the key variable. From volatility he constructed his own approach to trading bands and created his famous Bollinger Bands. While many analysts believe in keeping their formulas hidden, Bollinger is a proponent of openly sharing his work. This openness, coupled with the effectiveness of his techniques, allowed Bollinger Bands to become so popular and widely used.
IN 2001 after years of being asked to write a book about the subject, "Bollinger on Bollinger Bands" was published by McGraw Hill. Since then it has been translated into seven languages and Bollinger has been an invited speaker in Europe, Asia, Africa, Australia and Russia as well as all over the US.
When asked what advice he would give to investors using his bands Bollinger says "Users need to remember that tags of the bands are just that, tags not signals. A tag of the upper Bollinger Band is NOT in-and-of-itself a sell signal. A tag of the lower Bollinger Band is NOT in-and-of-itself a buy signal. Price can, and does, walk up the upper Bollinger Band and down the lower Bollinger Band."
Bollinger is not one to rest on his laurels; he continues to develop new technical analysis tools for the financial markets. In keeping with his philosophy of sharing his work, he has created numerous websites each focused on different ways to analyze the markets. But Bollinger Bands are the core of much of his work and he adds "One of the great joys of having invented an analytical technique such as Bollinger Bands is seeing what other people do with it. It is exciting to see human ingenuity at work."
For investors/traders who want to use Bollinger Bands, his website http://www.BollingerOnBollingerBands.com provides an easy way to implement the techniques and indicators from his book for the US equities markets. His newest site http://www.BBForex.com does the same for the forex market. A free tutorial on Bollinger Bands is available at http://www.BollingerBands.com
About John Bollinger
John Bollinger, CFA, CMT is the president of Bollinger Capital Management, Inc., an investment management company that provides technically driven money management. Bollinger Capital Management also develops and provides proprietary research for institutions and individuals.
John Bollinger is the recipient of the 2005 Market Technicians Association Annual Award for Outstanding Contribution to the Field of Technical Analysis. He is widely recognized because of his market analysis and commentary on CNBC and his speaking engagements at financial conferences worldwide. He is both a frequent contributor as well as a featured expert for publications including Investor's Business Daily, Technical Analysis of Stocks and Commodities, the New York Times, Los Angeles Times and USA Today.
John Bollinger is available for interviews.
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