Bollinger Bands are a very useful type of technical analysis tool. And today we’ll show you how to use Bollinger Bands in your day-to-day trading practices. To have Bollinger Bands explained simply, it is basically just two standard deviation bands (one positive and one negative) on either side of the SMA in a given chart. The Bollinger Bands indicator was mainly designed with the intention of identifying when assets are either oversold or overbought. And to form your Bollinger Band strategy, you will need to consider three bands: the simple moving average, one upper band, and a lower band. Typically, the Bollinger Bands strategy suggests that the top and bottom bands be 2 standard deviations apart from the SMA. However, this doesn’t necessarily have to be the case, and different Bollinger Bands strategies may imply other values. But in any event, the very first step in your Bollinger Bands day trading strategy is to calculate the SMA, which is usually the 20-day SMA. Next, you will need to calculate the standard deviation in order to form the remaining two bands. There are many applications in various trading styles for Bollinger Bands, options trading being one example. There’s also the Bollinger Bands scalping strategy to consider, which, too, is quite popular for quick gains from short-term volatility. Watch the full video for our detailed Bollinger Bands tutorial and find out how Bollinger Bands forex traders use this unique tool in their trading strategies. And don’t hesitate to let us know in the comments what your take on Bollinger Bands trading is. If you liked our Bollinger Bands trading strategy video, please don’t forget to give it a thumbs up! And for more on Bollinger Bands secrets and trading tips, be sure to subscribe to the Capital.com channel! #BollingerBands #BollingerBandStrategy #BollingerBandsIndicator *** Explore trading and start investing with Capital.com. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71.2% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.