Envelopes and Methods of Price Containment
just under the SMA. Conversely, if price closes below the SMA, enter short at the
lower one‐SD band with a profit target at the two‐SD lower band. To improve the
effectiveness of this approach, look for any trendline, chart pattern, or overlay break-
outs that coincide with the Bollinger one‐SD entry, with oversold conditions for an
upside breakout and overbought conditions for a downside breakout on the momen-
tum oscillators. See Figure 12.16.Figure 12.15 Reversal Entries on Bollinger Bands Working Effectively in Pinpointing
Potential Reversals on the 30‐Min Chart of Silver.
Source: MetaTrader 4Figure 12.16 Bollinger Bands Setup 1 on the Daily Chart of Intel Corp.
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