Using the Lower Bollinger Band Strategy
Most users of technical analysis will use mixture of technical tools with the bollinger band strategy when they are buying and selling stocks. Nevertheless, there is a method that you can use which relies solely on the bollinger bands to make strategic stock trading decisions. This method involves buying stocks during oversold conditions, which is indicated when the lower bollinger band is broken.
It is often the case that once a lower band has been broken as a result of heavy selling, the stock's price will very soon return from the lower band and move upwards into the middle band. The bollinger bands help to highlight this situation which astute investors can profit from. Whenever the stock closes below the lower band, an investor is then signaled to buy the particular stock the next day, in anticipation that the price will soon increase again.
