By John A. Bollinger

Relocating averages have lengthy been a staple for monitoring the process a stock's rate. yet averages are just a part of the tale, variability is both very important. The deviations of present costs from the relocating averages (of various lengths) are wide-spread by means of traders as signs. Bands above and under the relocating common were used to designate surprisingly huge diversifications, with numerous principles for reading those occasions as indications for destiny strikes in rate. Bollinger's specific contribution used to be to take not just the common expense under consideration, but in addition the adaptation of the costs and growing bands of increasing and contracting dimension because the costs develop into roughly variable over a time period. This provides an entire new size to the monitoring of rate activities. He offers many examples and substitute interpretations of those Bollinger Bands. it's a helpful software for someone who depends upon technical research to trace and forecast cost routine. in general, the extra relavent details you could comprise right into a sign, the more advantageous it will likely be.

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KEY POINTS TO REMEMBER Basic data include the open, high, low, close, and volume. Don't neglect the open. Four types of charts are line, bars, point and figure, and candlestick. Bollinger Bars are the mamage of bars and candlesticks. Log scaling is important. Normalize volume. TIME FRAMES Throughout this book three time frames are used: short, intermediate, and long. They are familiar terms, but they probably convey unique meanings to you based on who you are and how you trade. In one sense they can mean different things to different investors; in another sense they convey similar psychological concepts.

The purpose of this book is to help you avoid many of the common traps investors get caught in, including the buy-low trap where the investor buys only to watch the stock continue downward, or the sell-high trap, where the investor sells only to watch the stock continue upward. Here, the traditional, emotional approach to the markets is replaced with a relative framework within which prices can be evaluated in a rigorous manner leading to a series of rational investment decisions without reference to absolute truths.

Thus a short-term chart used daily bars by definition. In the early eighties, the pace of change started quickening. The demarcation was the introduction of stock index futures trading, with the birth of the ValueLine futures Waded on the Kansas City Board of Trade. Short tenn started meaning hourly charts, intermediate term daily charts, and long term weekly or monthly charts. In the intervening years the trend has continued relentlessly toward ever-shorter time frames. 1 for possible time frame combinations.

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