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| Rallies and declines love to cling to Bollinger Bands. But when they move sharply into (or through) a band extreme, they often encounter momentum resistance. Many short-term traders rely on small gains. Avoid giving back too much of your profits, or you'll have to find a different strategy. This means that you should consider a fast exit when expanding bars move into resistance levels. These predict short-term reversals that bleed your profits. In addition to BBs, horizontal S/R levels (such as double tops or double bottoms) signal exits that rely on the same bar expansion strategy. Keep in mind that you can always reenter the trade if you think the range is about to break. |
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