top of page

Bollinger Bands forex indicator

Developed by technical trader J. Bollinger in 80s. Bollinger bands are using moving average (MA) together with two trading bands (above and below). Those are calculated by adding and subtracting standard deviation.

Standard deviation as used in BB is tool of measuring market volatility. Bollinger bands therefore adjust themselves to conditions on forex chart and subsequently visualise, how much can price vary from its average value.

For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.

Anatomy of Bollinger bands

BB are created by centre line and two channels surrounding it. Centre line is calculated as EMA or MA (Exponential moving average or simple moving average). Two channel lines drawn on the sides, are calculated as standard deviation and therefore can expand or shrink according to market volatility. Narrow BB tunnel clearly shows low volatility and it is widened as market volatility rises.

Use of Bollinger bands

By connecting Bollinger bands indicator with manually drawn trendline, forex trader can establish width of a trend tunnel with high certainty.

  • When price repeatedly touches and closes above upper Bollinger Bands line, market can be considered to be overbought.

  • When price repeatedly touches and closes under lower Bollinger Bands line, market can be considered to be oversold.

  • Channel lines of BB can be used as profit targets and stop loss levels.

  • Bollinger bands are often used as confirmation of price action. For example, pin bar reverse formation (forex strategy) found on BB channel boundaries is considered to be confirmed reverse signal.

  • Bollinger bands can be coupled with oscillators such as RSI (Relative strength index) to find suitable entry, within forex trend and specific market volatility.

  • Reverse Bollinger bands approach. Various studies have confirmed that Bollinger bands can be employed as contrarian indicator at some market conditions.

Bollinger Bands forex strategy



“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 


Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of

bottom of page