In this lesson, you will learn: How to construct a Double Bollinger Band (DBB). Rules for interpreting price action within the three zones of the Double Bollinger Bands. How to judge the trading trend and its running direction. Examples of how to find good entries and exits. Our Double Bollinger Bands (DBB) course is divided into several lessons. Double Bollinger Bands is a great variation of the standard single Bollinger Bands. Its performance is more powerful, and it can help you better understand the kinetic energy in sideways and market trends with strong trends, and then assist you in judging the market trend. As the name suggests, the Double Bollinger Bands indicator contains two series of Bollinger Bands indicators. For example, while first setting a series of ordinary Bollinger band intervals with a distance of two standard deviations above and below the 20-period moving average, an additional one is added that is only one standard deviation above and below the 20-period moving average. narrow range. However, the above are just the conventional default settings. Traders can adjust the period of the moving average and modify the multiple of the standard deviation according to actual needs. The Double Bollinger Bands indicator is divided into three main areas, and we will discuss each area, including their correlation with price action. We will explain the 4 rules associated with these areas and how to use them for better trading.

7.1 Double Bollinger Bands - Definition and Construction

In the previous lesson, we learned that Bollinger Bands are a trend indicator that can be used in a sideways or narrowly volatile market, but in the context of a strong trend, their use alone may not be as effective as desired. So, now we will introduce the concept of Double Bollinger Bands (DBBs) and learn more about them. Double Bollinger Bands are a powerful variation on the standard single Bollinger Bands because they can reveal information about momentum conditions in both sideways and strongly trending markets, thus reflecting more on trend strength. This lesson will show that, unlike standard Bollinger Bands, Double Bollinger Bands are very useful in strongly trending markets because they help us better determine the true momentum shown in price action on a candlestick chart.

7.2 Double Bollinger Bands - Three sets of rules for three zones

As we already know before, the Double Bollinger Bands indicator has 3 ranges, which are buy zone, sell zone and neutral zone. In this lesson, we will show how the price moves within these zones and what these movements mean for a trader. At the same time, it will also introduce 3 rules that must be followed when trading with the Double Bollinger Bands indicator.

7.3 Double Bollinger Bands—Rules 1 and 2 of the Four Major Rules

In this lesson, we will detail how to use the Double Bollinger Bands indicator as a basis for trading and the required rules, and we will show how to apply Rule 1 and Rule 2 to the 3 intervals of the Double Bollinger Bands that we learned earlier.

7.4 Double Bollinger Bands - Rule 3 of the Four Rules

In this lesson we will outline the third of the four principles of the Double Bollinger Bands trading strategy. When the K-line price fluctuates in the "neutral" area of the double Bollinger bands, whether investors are tracking an upward trend or a downward trend, it is a signal to exit the current transaction, because any trend is fading. There is not enough upside or downside momentum at this point to give investors the confidence to continue following the trend. Therefore, it is time to consider getting out of the trade, or use a basic range trading strategy instead.

7.5 Double Bollinger Bands - Rule 4 of the Four Rules

This lesson reviews the fourth rule of the double Bollinger bands trading strategy. Rule 4 tries to avoid the risk of "going long at the top of the mountain" or "short at the bottom of the valley" when chasing the existing market trend, because the market itself may encounter strong Resistance or support, or exhaustion of trend momentum. This rule is not easy to apply and its success depends on how investors interpret other technical and fundamental news. Therefore, we will discuss how to seize every opportunity to make money and avoid becoming a "taker" (if you accidentally go against the trend, you may suffer heavy losses).