ADVANTAGES AND DISADVANTAGES OF THE BOLLINGER BANDS INDICATOR.

ADVANTAGES AND DISADVANTAGES OF THE BOLLINGER BANDS INDICATOR.

Advantages

  • Bollinger Bands are visually easy to interpret
  • They can be used both as a volatility indicator and a momentum oscillator
  • Bollinger Bands can be applied on any underlying asset across any time frame
  • The indicator generates signals that not only provide precise entry levels, but also specify stop loss and take-profit zones

Disadvantages

  • Bollinger Bands work better in sideways markets than in trending markets
  • While it is possible to identify extreme price readings with Bollinger Bands, they are not ideal for this purpose
  • Even though Bollinger Bands can trigger their own signals, it is important to use these signals in concurrence with other aspects of technical analysis

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