| The forex business idea is to buy currencies when they are at their lowest points and be smart enough to seize the slightest opportunity that arises from the market in selling the currency when it is to its highest value. These calculations and realizations of the low and high currency times during the day are not possible to know without the forex tools. One of these tools is the Bollinger bands tool. It was introduced in the 1980s by John Bollinger using three lines to show the volatility and currency momentum of currencies at every unit time. The market of currency exchange is not static but dynamic.
A certain currency will be high at one moment and get low in the next hour. They are similar to gold prices, which may be high at this hour and decline in the next hour due to the market value fluctuations in the global market. There are a lot of things that influence a rise or fall in the currency value in the global market. It is the opportunities presented by these fluctuations, which makes forex traders earn from the currency exchange. On the other hand, there will always be buyers and sellers online who need certain currencies for their own personal purposes and others who have some currencies that they wish to sell in exchange for other currencies. Forex business had made it easy as buyers and sellers of currencies can do it online without showing up physically and the bureau or bank to do the exchanges.
Bollinger bands will show a clear pattern from which you can read the high and low currency points. Bollinger bands forex appear in three lines, which is the upper band, lower band, and the middle line. The space between the upper and lower bands shows the currency\'s volatility in every unit of time. When space widens up, it means that the volatility of the currency is high. However, when space consolidates and shrinks, it means that the currency is at low volatility at that moment.
The upper band\'s extreme upper ends also tell when the currency is at the high end, and the other lower extreme showing when the currency is at its lowest value in the market. Through these points, you can decide to sell your currency when it is at the highest value and buy the currency when it is at its lowest value. However, these moves need to be calculated and influenced by other factors as well. The idea of all that glitters is not gold is very applicable in forex trade. The fact that Bollinger bands can show both market volatility of the currency and the momentum makes it reliable in forex trade. |
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