Panda Talks About: Bollinger Bands
Hello everyone! I figured with all the excitement about charts and price fluctuations, this would be a good time to do a post on some fundamentals of Technical Analysis.
Here is a chart.
It's a chart of STEEM! Specifically, it's a 5-minute chart of STEEM/BTC, which shows the price changes over the last few hours.
Here is the same chart with Bollinger Bands (white lines) added.
Notice how the price tends to bounce off the upper and lower bands?
Bollinger Bands consist of three lines. The middle line is a simple moving average (an average which is constantly being recalculated). The upper and lower lines are each two standard deviations away from the middle line. In other words, according to normal distribution roughly 95% of the shenanigans the price gets up to should occur between the upper and lower bands.
What this means in a practical sense is that any time the price moves above or below the upper/lower lines, it is "increasingly likely" to rebound back towards the average.
TL,DR: Buy Low, Sell High.
Panda Out.
the price moves above or below the upper/lower lines, it is "increasingly likely" to rebound back towards the average. Finally if We can wait until the right time, we can expect revenue? Although It is hard to wait!
thank you for your opinion!
Have a happy day~
oh hai!
yes! although it is not guaranteed (nothing in statistics really is) the further outside of a bowlinger band a price gets, the more likely it is to trend back.
what is important to remember about all this, is that the exact position of the price relative to the band DEPENDS ON THE TIME FRAME OF THE CHART.
A chart could show the price close to the lower bollinger band on a 15-minute scale, while the exact same chart be above the higher bollinger band on say, a 4-hour or 24-hour scale.
It's all relative!
As to whether the price will ultimately go up over time, leading to revenue on a static amount invested at present, nobody knows for certain! What I can say is that if people continue to join Steemit and create interesting content, the popularity (and therefore price) of steem will continue to rise (relative to inflation)
Agree.
THE TIME FRAME OF THE CHART.
I think most important thing is time.
I like day scale chart^^
thank you.