Bollinger bands in tech analysis
One helpful technical analysis indicator that I use is the bollinger bands indicator. The main thing to understand about the bollingers (BB) is that price stays within the bands 95% of the time. So when price pops outside the BB it is quite probable that it will need to reverse or momentarily retrace back inside the BB. I especially like to watch the 30minute time frame chart with the BB plotted on it. Most BB indicators will also plot a 20 moving average. So I like to watch when price pops above the BB and then pops back inside more often than not price will retrace back to that 20 moving average before resuming that previous move. This is a great short term trade to just catch 10-20 pips. I suggest that you take a look at a 30minute chart and plot the BB on it and then track how often price makes these predictable moves. Another thing to note: if the 20 moving average is slanting up and price pops down to it and stops, it is very likely that price will then continue in its upward path. Conversely, if the 20 ma is slanting down and price has moved below it, touch the BB, and then pop back up to the 20 ma and stop, then its very likely that price will then continue to move down after that. As always, test any new trade strategies on a demo account before risking real money.