Bollinger bands

Bollinger bands are used to study the volatility of the stock.
Three bands are drawn.
An SMA of 20 in the middle and and upper and lower band each of SMA +/- 2 Std. Devn.

Sharp increase or decrease in price will cause widening of the upper and lower bands.

Although getting buy/sell signals directly from a study of the bands is difficult, together with other indicators it will generally give good indication of a reversal. Especially double top sell and double bottom buy.

20 day SMA and 2 SD is used for intermediate trading. For short term 10 day SMA and for long term 50 day SMA is used.

3 SD draws really huge bands, so use it only if you are studying extremely long periods with 200 day SMA and where the price shows extreme volatility.

As far as day trading goes I have no idea if bollinger bands work.

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