How to day trade with Bollinger bands

In order to discover a trend in an intraday time frame you need to look a little harder than you ordinarily would with a daily chart. Very often these shorter term trends will come and go so fast that if you're not ready when they are you're left in the dust. Adding Bollinger Bands to your everyday line-up of technical indicators will help you stay on top of the market and follow the trends and patterns that take place in everyday trading.

How can a day trader use Bollinger bands?

Bollinger Bands provide inconceivable strength on shorter time frames. Typically indicators perform better when applied to longer time frames by virtue of the quantity of data being calculated. On the other hand, Bollinger Bands are fine tuned for the express purpose of profiting on trends and their reversals and keeping on top of the market volatility.

For instance, in one day, a $.10 change in the price of a $100 stock is extremely minimal; looking at a tick chart this will appear a much greater move and will be extremely evident with Bollinger bands. It is far more likely that a $.10 change will occur on a 1 minute chart than a $1 change on a 10 minute chart.

Finding gaps and flats

Most day traders use a 1 minute or tick chart resulting in low volume and a chart filled with gaps and bars that appear to stand still. These empty charts are particularly hard to trade, as their movements are fast and sharp and not very well defined against the background. Again finding the trends may not be easy, but with the correct settings on your Bollinger bands finding and pinpointing trends is made easier

Where large sums of money are concerned, it is advisable to trust nobody.

Narrowing is a great predictor of moves

Constricting Bollinger bands is like the calm previous to the storm, watch out because the storm is about to hit. Take a look at 100 stocks and it is obvious that a contraction of the bands normally always results in expansion and a powerful price thrust.

How to use Bollinger bands and stochastics

When you use stochastics in conjunction with Bollinger bands you get a very impressive combination. When both the Bollinger Bands and Stochastic indicator curve up at the bottom near a low, it is quite often a buy indication, while the opposite is true for sell signals. If you want to isolate and take full advantage of a new trend try incorporating Bollinger bands with another robust indicator. If you are going to day trade this mix of a momentum indicator and Bollinger bands will prove to be priceless.