Bollinger Bands: what do you do when price hits the band?

Price touching a band means volatility has stretched — but stretched markets can stretch further. The mean-reversion play (fade the touch) and the momentum play (ride the band) are opposite trades on the same signal.

Bollinger Bands: what do you do when price hits the band? — risk-reward diagram
A risk-reward ratio of 1 to 2

Which are you?

  • how you decide between fading and riding
  • the confirmation you need before acting on a band touch
  • how bands fit with your other filters
Bollinger Bands: what do you do when price hits the band? — candlestick anatomy diagram
The parts of a candlestick: wick, body, open and close

The Bollinger Bands guide covers both interpretations.

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