Bollinger Band Trend Reversals - Trading Double Tops and Double Bottoms Stock Indices Strategies

A trader should wait for the price to turn in the opposite direction after touching one of the Stock Indices Bollinger bands before considering that a Stock Indices reversal is happening.

Even better a trader should see the price cross over the moving average.

Double Bottoms Trend Reversals

A double bottoms is a buy signal setup. Double tops occurs when Stock Indices price action penetrates the lower Bollinger band then rebounds forming the first price low, then after a while another price low is formed, & this time it's above the lower Bollinger band.

The second price low must not be lower than the first one and it important is that the second price low does not touch or penetrate the lower Bollinger band. This bullish Stock Index setup is confirmed when the price action moves and closes above the middle band (simple moving average).

Double Bottoms - Bollinger Band Trend Reversals Strategy Using Double Bottoms Pattern

Double Tops Trend Reversals

A double top is a sell signal setup. Double tops occurs when Stock Indices price action penetrates the upper Bollinger band then rebounds down forming the first price high, then after a while another price high is formed, & this time it's below the upper Bollinger band.

The second price high must not be higher than the first one and it important is that the second price high does not touch or penetrate the upper Bollinger band. This bearish Stock Index setup is confirmed when the price action moves and closes below the middle band (simple moving average).

Double Tops - Bollinger Band Trend Reversals Strategy Using Double Tops Pattern