this video is a complete guide to the Binger bands indicator Binger bands is one of the most powerful indicators that can be used to trade breakouts reversals and pullbacks we will show you how to use this indicator to create highquality trade entries like this by the end of this video you will become an expert on the Binger bands indicator therefore be sure to watch the entire video without skipping anything here are the topics covered in this video firstly we will learn the basics of the Binger bands indicator here we will understand the concept of volatility
and how it can be seen through the Binger bands next we will look at three simple setups using the Binger bands these are breakouts reversals and pullbacks a quick word before we start if you're serious about taking your trading to the next level you need to join our exclusive Channel membership today for a price smaller than a regular meal for two people you'll gain access to our three comprehensive trading courses don't let this opportunity slip away click the join button below and embark on your journey to trading Mastery today with that being said let's get
back to the video basics of Binger bands the Binger band is a volatility based indicator therefore to understand it we must first understand the concept of volatility in simple terms volatility can be defined as the speed at which the price moves the price does not move at a constant speed we have low volatility and high volatility environments in a low volatility environment the price takes a long time to cover a certain price distance we see small price swings that move in an unorganized manner we have red or green candles with no real moment momentum low
volatility environments are often known as sideways or range-bound markets during such times it can be very difficult to trade because the price does not move much however the price movement is organized and predictable to a certain extent therefore small and calculated trades can be taken in such conditions on the other hand we have high volatility environments during such times the price moves in a quick and Rapid manner creating large price swings and big candles such moves have a lot of momentum High volatility environments are often referred to as trending markets during such times it can
be easy to trade however the entries and exits must be aggressive in such markets because the price can go wild in any direction therefore in a low volatility environment you should be a conservative Trader and in a high volatility environment you should be an aggressive Trader but how do you identify the volatility this is where the Binger bands come in the Binger bands indicator is designed to help identify the market volatility with ease it consists of three lines its default setting is set to 20 periods and two standard deviations on these settings the middle line
is a simple 20 period moving average the upper band is calculated by adding two standard deviations to the middle line similarly the lower band is calculated by subtracting two standard deviations from the Middle Line during low volatility we see that the bands become extremely narrow and the price moves sideways inside them the price keeps on bouncing from the upper band to the lower band as you can see the price stays within the bands most of the time when the price closes above the upper band it immediately reverses downwards similarly when the price closes below the
lower band it immediately reverses upwards during High volatility the bands go wide and the price moves extremely near the upper or lower band in an up move the price will stay near and around the upper band the price May close a few candles above it without reversing similarly in a down move the price will stay near and around the lower band a few candles can close below it without any reversal therefore the Ballinger band gives us a clear idea of volatility if you follow a trend trading strategy then you should avoid placing trades when the
Binger bands are narrow you should only trade when the Binger bands are wide if you want to trade reversals then you should avoid trading when the Binger bands are wide you should only trade when they are narrow with that being said you cannot trade blindly based on the size of the Bands you need a strategy with a good set of rules to trade if you are enjoying the video so far then be sure to hit the like button and subscribe to our channel to never miss any of our videos with that being said let's get
back to the video here are basic setups using the Binger bands setup one breakouts a breakout is a point where the price breaks out of a sideways market and transitions into a trend if you can enter at the right moment you can capture a significant move with a very tight stop loss the Binger bands can help us identify the right time to enter these breakouts we first need to identify a sideways Market to do that we will look for areas on the chart where the Binger bands were relatively narrow we also want the price to
move sideways during that time once we identify such a market we need to ensure that the price has stayed inside the bands for most of the sideways range the upper boundary has provided resistance to the price similarly the lower boundary has provided support to the price now we wait for the price to break out of the Binger bands on this candle we see that the price creates a solid green candle that breaks and closes above the upper band as we discussed earlier the price will generally move inside the Binger bands so a breakout like this
signals a strong force in the market Market therefore this is a valid breakout setup here is a bearish breakout here we spot a tight sideways range we see that the bands were squeezed and very narrow the candles moved sideways and remained inside this tight range for a long time the upper band provided resistance to the price similarly the lower band provided support to the price so we identify this as a tight range we wait for the price to break above or below this range on this candle the price breaks and closes below the range it
is a large red candle with a strong close so this is a valid breakout setup setup two reversal setup Binger bands can be used to trade reversals with high probability as we discussed previously the price will remain inside the Binger bands for most of the time therefore whenever the price breaks or touches the upper or lower band we can expect a reversal let's first understand the cell setup here we see that the price was in a sideways range trading inside the bands the upper and lower bands held the price inside them on this candle the
price touched the upper band and immediately reversed then it went down to the lower band the price once again touched the upper band here and reversed immediately this time as well the price goes on to touch the lower band here is a bullish reversal setup here we see that the price touches the lower band on this candle and it immediately reverses and moves upward the price goes on to touch the upper band and here so we can say that the reversal setups also work well setup three pullbacks pullbacks on Binger bands are one of the
simplest setups to trade pullbacks on the trend we first need to determine the trend of the markets when the price is moving within the upper and the middle band we consider the price to be in an uptrend in an uptrend like this we will look for buying opportunities at pullbacks the price usually pulls back to the middle band so we will look to buy Here similarly if the price is trading between the Middle band and lower band we consider this a downtrend in a downtrend like this we will look for selling opportunities at pullbacks these
pullbacks happen at the middle band so we will look to sell around the middle band so these are the three key setups using the Binger bands if you want to trade based on these setups you must add other confluences to identify high probability trade setups these confluences can be support and resistance Candlestick patterns trend lines Etc that brings us to the end of this video If you like this video then be sure to hit the like button and subscribe to our channel so that you never miss any of our new videos see you soon
