Contents
Abstract
During the trading process, most Investors would usually set around 1 to 3 Moving-Averages(MA) for the candlestick chart as a trend reference. However, when viewing the Candlesticks Chart of the same product in different interval, you may find the auxiliary effect of these MAs may seems to be somewhat insufficient sometimes. There may be issues, such as the short-term MAs being way too sensitive, or the long-term MA being obtuse, and some MAs do not seem to be very useful when switching to different range. The following is a short-term trading gadget that may assist readers to solve such problems.
Introduction to Indicators
Bull-Bear-Bollinger-Bands(BBIBOLL or Bull And Bear Index)，Abbreviated to BBI
BBI is a technical indicator obtained after the weighted-average of MA of different days (or Hours) from the statistics. The advantage is; the indicator has comprehensively averaged the means of different days, so readers do not need to adjust the parameters when switching to different range of candlestick chart. Secondly, due to the characteristics of multiple sets of MAs, it is more stable and neither too sensitive nor too unresponsive when judging the short-term market trends. Investors only needed to pay attention to this indicator. However, BBI does not include any longer-term averages, so the investors would usually add an extra 60Days MAs as an auxiliary reference for the longer-term of trends.
Indicator Usage
Long & Short
The first thing to conduct is to verify whether the present candlestick is overlapped the BBI Medium Band, or located above or below (As shown below).
The likelihood of vacillation increased, as candlestick overlapped Medium Band. If the candlestick located Above the medium would indicate overall tendency apt Bullish, and conversely, if Below, the trend would prone to be Bearish.
Distance Measurement
Secondly, observe the Contraction or Expansion of the Upper & Lower Band of BBI. The Expansion represents the possibility of the scope of appreciation/depreciation increased. Contrarily the narrowing layout would represent the likeliness of fluctuation would be limited with roughly ideal scope of contraction. At the same time, we could utilize the upper and lower bands could also be the reference of the Take-Profit & Stop-Loss threshold.
Indicator Demonstration
In the 1D chart of XAUUSD, the previous quotation closes at 1768 and is lower than Bollinger’s Medium Band, this represent the upcoming candlestick would be favoring to operate apt Short position. And in this case, we would place the Stop-Loss at the Medium Band, and the Lower Band will be the target.
Epilogue
As the saying goes, “if you want to do a good job, you must first sharpen your tools.”. This proverb is especially suitable for short-term traders, because in the process of short-term trading would be required to have more agile measurement tools in order to instantly respond to the market changes. The BBI have been used as short-term measurement indicators for years. If supplemented by short-term tools such as KD indicators for repeated confirmation, superimposing the 60D MA for complementary purposes. Under the premise of diligent practice of readers, you would be able to master the short-term transactions by time to time.
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