Thread by @Stock_Learner20

#Bollingerbands (Threads to understand & It's actual use)

( Practical use)

*We all know that #BB is give us volatility of stock.
* It works on standard deviation principle
* Price always wave between Upper and Lower band.

* It is always said that use #volatility contraction .
*After Volatility contraction price , move in quicker way.
* To identify this #volatility contraction, we use #BB

Examples show that round is volatility contraction. Price stuck in range and volatility is cooled off.

but , how to identify that volatility is really contracted?
many false signal will be generated.

So here is the secret.
Dont just trap in just #Bollingerbands

I am sharing secret to use it with #ketlner Channel

Lets see little maths behind.
#bollingerbands is 2 standard deviation.
#keltner Channel is also worked on volatility , but it takes "ATR".

Now here the catch, Most of the time 2SD is higher than 1ATR.

But , when 1ATR become higher than 2SD, IT IS REAL VOLATILITY CONTRACTION.

grasp this pic
#keltner channel is always inside the #bollingerbands.

#Bollingerbands #squeeze (volatility contraction) happened when

" #bollingerbands comes inside #keltner channel"

let's see.

for normal case , Point 1 is to be assume as #bollingerbands #squeeze but no..it is not..look price is almost there.
Point no 2. where
#Keltner channel (1 ATR) came out from #bollingerbands.

Bingo..
The real squeeze.

Look closely what happened with #sail on 17th Aug
The real squeeze happened.
and on 18th Aug .
Boom.

Select the stock for next which has made #boolingerbands #squeeze at the end of the day.

Mind well, it gives you contraction, not direction.
sometime, expansion is so violent that we are unable to catch it.
Point 1 is tradable but point 2 was so quick move that we may trapped

#bollingerbands squeeze stock for 24th aug on 15 min time frame

#tcs
#biocon
#maruti
#titan
#mcdowell
#iciciprudi

Study purpose....

#iciciprudi
given trend , but
most of volatility contraction , expand so fast , we couldnt able to catch it. like #titan