Detect Price Reversals with Bollinger Bands

Bollinger Bands are one of the main indicators used by professional traders. Because Bollinger Bands indicators have different characteristics with other indicators. In fact, if we have understood the characteristics of Bollinger Bands then surely want to always use these indicators in forex trading. Privileges possessed by the Bollinger Bands is if the condition of the market is sideways so the upper bands (upper bands) and lower bands (bands section below) will be flat. If the market is going higher volatility then the upper and lower bands will open wide. I think such conditions already provide sufficient information for us to read the movement of the market. Look at market conditions described by Bollinger Bands:

In simple terms, it can be said that:

• The market will be bullish if the upper and lower bands wide open, while the price is above the middle bands. 
• The condition of the market is bearish if the upper and lower bands wide open, while prices were below middle bands.

So, how to use Bollinger Bands indicator is very simple and not complicated. Because of our attention only on the price movement of above or below the middle bands. But, this time we will discuss the price reversal using Bollinger Bands indicator. 

Then, how do I read a reversal of market prices by using Bollinger Bands indicator?

Look at the image below:

Buy or Sell Confirm

Reversal from BEARISH to BULLISH

• Note If the trend is bearish (downtrend) then there is a bullish candle close above the lower bands.
• Wait do not enter the market, to appear more bullish candle cover exceeds the previous candle high (higher than the previous candle). 
• If the candle close exceeded the previous candle then means to confirm the price will either be a bullish direction, then we take BUY position.

Reversal from BULLISH to BEARISH

• Note If the trend is being bullish (uptrend) then there is a bearish candle closes below the upper bands.
• Wait do not enter the market, to appear more bearish candle cover exceeds the previous candle Valley (lower than the previous candle). 
• If the candle closes lower than the previous candle then means to confirm the price will either be a bearish direction, then we take the SELL position.

Reverse the direction of the market conditions that usually if the price has reached the level of overbought as well as oversold.