Thursday, February 20, 2014

Bollinger bands and indicators ...

Perhaps one of the most interesting aspects of Bollinger Bands is the rhythmic contraction and expansion of the bands you can see on the charts.

In general,the idea is that while price is neither cyclical—in a regular sense—nor forecast-able using cycles, volatility is both.

The most interesting conclusion is that low volatility begets high volatility and high volatility begets low volatility. This is the foundation of The Squeeze.