How to use stops Ep.3Juno
There is another technique that we will see right away which is commonly seen and used. On the video, you can see an indicator that I added : Bolanger bands.
The Bolanger bands :
There are many traders who use that. I voluntarily leave with a period of 20. I know there are some people who like to use higher values.
The Bands of Bolanger, we repaint them a little bit. We don't tell you but if you observe, you will see that : as the course progresses, the gap (or expansion) of the bands paint a little bit. So, they change and adapt.
It less than for the other indicators, but a little bit anyway. So, there are many people like to say : "That's it, when we popped a band, it means that we are on oversale or overbuy and therefore, it will bounce back in the other direction."
This is true when you look in the past, but when you trade this indicator, it is false. And you see for example here, it was not reassembled. That's not why it bounced.
Be cautious !
There are many examples which can be found by looking for yourself. And you will see that putting a stop above a Bolanger band, is dangerous! You will be out often.
So, maybe that makes some stops which are not very expensive, especially since we have a period of 20. But, for me it is not something very relevant. You see it there, we have a very violent movement. It was completely stuck in the Bolanger band, we were even put out at times. This is not the reason why the cost is down again immediately.
It is an indicator that, for me, is to be use with a specific manner. But, in any case, not in this way.