Bollinger Bands Width Indicator Explained -- with David Moadel
hello friends and welcome to looking at the markets with David Modell this is
the Bollinger Bands width indicator that goes along really well
kind of like a partner or an adjunct or an addition to the Bollinger Bands
indicator that so many people use because it is kind of a secondary
indicator that you can put maybe at the bottom of your screen to indicate how
wide the upper and lower Bollinger Bands are it's a really nice thing because I'm
on trading view right now and I'm looking at the one-minute candlestick
chart for Twitter stock and a lot of day trader and in intraday traders will use
the one-minute or two or 5-minute candlestick charts to help them day
trade and sometimes they'll use the Bollinger Bands and you if you want to
know when a breakout might happen you can use it and you can wait until the
two the upper and lower Bollinger Bands get really really tight some people call
that a Bollinger Band squeeze but how tight is tight you know it's hard to say
and so you can use the Bollinger Bands width with indicator and when it gets
really low when it gets close to the bottom line here because it is an
oscillator meaning that it bounces up and down and up and down within a range
so it's bound it's a bounded indicator which they
would call an oscillator and when it gets close to you know the bottom close
to zero that means it's really tight and if it gets close to zero and it's been
close to zero for a long time meaning the Bollinger Bands width
indicator you know stays at the bottom for a long time then that means that the
tension is building and building and building up okay and so that could mean
that an explosion to the upside or downside might be ready to happen so now
this is also what's useful about it is that sometimes it's hard to tell just by
looking at the Bollinger Bands you know how skinny it is because sometimes it
gets a little distorted and I'll show you see how distorted that gut right
when you get really crazy price action you can get this kind of crazy-looking
thing okay this looks super super skinny but
then when I move when I move it over a little bit when I scroll to the left
it's not really as skinny as maybe we thought and the Bollinger Band width
indicator shows that Oh see it's really not that close together relative to
where it's been recently okay so you see how it got distorted there okay
sometimes crazy wild price action can do that alright and so the Bollinger Bands
width indicator can you know help you reduce the distortions or not it won't
reduce the distortions on the chart necessarily but it will help you to see
what you know what's really going on as far as the width relative to where it's
been recently is concerned and I do like it when it's been not only when the
upper and lower bands are not only tight but when they've been tight for a long
time that means that the tension is building and building and building and
the price action has just been going sideways and sideways for a while which
to me at least seems to make it more likely that it might break out or break
down you know could have a breakout to the upside or downside alright and when
that tension is really building for a long time that means that you know the
movement could possibly be really explosive alright and you can
double-check that with the bone the Bollinger Bands with indicator when it's
not only close to the bottom but has been there for a long time that really
makes me think okay something big might happen alright and you can also this is
a trading view calm you can also use it on stockcharts.com here and it's another
popular website or you can use it on your own charting platform whatever you
have if they offer the Bollinger Bands width indicator and this is Twitter
again but this is the daily candlestick chart each candlestick represents one
day of price action and so this might be better for swing traders who prefer to
hold their positions overnight or for a few days weeks months whatever it might
be and they do offer it here you'll notice that the numbers are different
though on stockcharts.com it ranges here at least from 0
looks like 60 or so whereas with tradingview comm they've got it in the
small decimal places here so it's kind of interesting but so if you're going to
use it by the numbers you have to adjust accordingly according to your platform
but if you're just using it visually then maybe you're just kind of
eyeballing it and saying okay it's really really tight here I'm checking it
here but I'm also checking it here with the Bollinger Bands with to get
something more objective because again it can really become distorted if there
are wild price movements on the Bollinger Bands ok so I hope this was
helpful to you and if you would like more help I do offer coaching for
trading or investing if you don't have a plan for your trading or investing no
that's really not good because you want to have a plan otherwise I don't believe
that your likelihood of success will be as good all right so my name is David
Modell and if you want that coaching you can go hunt you can contact me at David
Modell at gmail.com if you liked this video please give it a thumbs up on
youtube leave a comment let me know what you think about the Bollinger Bands with
indicator do you use it along with your Bollinger Bands and if you have not
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one thank you so much for watching and listening I'll talk to you again soon
you