All language subtitles for 5. How to Trade Consolidations With Bollinger Bands

Hello and welcome back to cryptocurrency trading masterclass by wealthy education.

In this video, we'll talk about trading consolidation's with Bollinger bands.

Now, if you remember, the Bollinger Band, basically with its default settings, will talk about or

will point out deviations, standard deviations, plus to minus two of the.

20 simple moving average, you know, obviously you can change all that or whatever, and if you remember,

we had talked about something called the Bollinger Band Squeeze, where it tightens up real quick and

then it explodes.

But there's also a way to use these to trade consolidation.

Consolidation looks a lot different than a squeeze.

It's more something it's more like a softening.

It's not really a squeeze, it does show volatility dropping.

It does show the range decreasing.

But there's a subtle difference.

It's almost like a rectangle pattern, actually.

And you can use this to tell you that, you know, when volatility is picking up or not.

So, for example, as I zoom through this.

I would consider this to be.

A consolidation, it's essentially a rectangle, right?

And the reason is, is that although we did collapse from a volatility standpoint, we didn't squeeze

the pattern.

We just kind of killed time going sideways.

And that's essentially that's really what you're looking for.

You know, a squeeze would probably be something more like like this where you see it pinch suddenly

and then it breaks back up.

So what this is doing is this is telling you that, hey, something's probably going to happen.

And if you are patient enough, you should get the signal.

So in this case, this is a theory.

I'm on a daily chart, you see.

Just kind of killing time here, killing time, killing time, and then all of a sudden you see the

market break above the top of the Bollinger Band, two standard deviation.

So what does this tell you, if you think about it logically?

That suddenly volatility spiked to the upside.

So that means momentum.

That's exactly what you're looking at as momentum to trade.

This is very simple.

What you're looking for is a return to the 20 Esmay the midline.

And if you look at this, you really didn't get that until this came of Sakir.

So you rode this from somewhere around two hundred and fifty dollars, depending on exactly when you

got in.

But even if you waited at the end of the day, you're talking to 60 to about four hundred.

As far as the Stop-Loss is concerned, you just simply put it on the other side of the Bolander band

or if you want to be a little bit more conservative.

On the other side of the simple moving average, pretty straightforward.

In and of itself, you can.

Look for other indicators to tell you that perhaps, you know, maybe something is going on here.

One that a lot of people like to mix is the fact you can see that we crossed a couple of times and then

suddenly it spread out as we started to break to the upside.

So something to consider.

Now, over here in Tehran, same situation, this could have been a squeeze if it kept tightening,

but it basically just sat here for a while.

You did get a little bit of hint of it widening.

So that tells you that we're going from a dead kind of consolidation to, OK, things are picking up

a little bit.

And then finally we get that close outside of the range and we take off again.

Let's go ahead and add the Magdy.

And see if that told us anything, you can see that once we got there, the line started to spread out,

the histogram started to rally.

And spread out more, which shows you that we really were starting to build up momentum.

We came back to this area here.

We did not get stopped out.

We did not take our profit because we did not break down below the 20 Esmay close.

This certainly was a close one.

Whether or not you would have moved your stop up there, that's entirely up to you.

That comes down to your risk appetite.

Generally, though, you'll get a pullback in take off.

You know, Marcus smart move in the same direction forever.

Obviously, we did finally break back through the TSM and Tron right about.

33 cents and you got in it, twenty eight, nice quick move on the four hour chart certainly shows some

strength there now in Bitcoin.

Now keep in mind, Bitcoin uses bigger numbers a lot of the time.

So this could have been a short squeeze.

But it was it it was simply sideways action.

This was more of a Bollinger band squeeze, but really what I like about this particular setup is the

fact that it closed outside of the Bolinger man, you're not uptrend anyways.

Stop loss on the other side of this, and if you look at it again, consolidation, do you think more

along the lines of a rectangle with Bitcoin now that we have broken above there?

You could use that same argument.

Not until we cross the 20 ESMAY, which is actually on this candlestick that's got you to about thirty

one thousand from twenty.

Nice move.

We could put the makdisi up.

But the simplest way to look at this is we broke the twenty thousand level that in and of itself will

attract a certain amount of attention.

Looking at Tron again, you can see that it was flattish for a long time.

So really, you probably could have just jumped out for the daily and made an argument for consolidation

right there.

And again, that was the same movie you were talking about, Ethereum.

You know, you can make an argument for a market that does this from time to time, a theory seems to

be very one step, two step.

So here is consolidation.

Right here, same situation, you breakdown, you finally closed below it, you write it out to the

20 again, it's with the trend we are seeing resistance right at the five hundred dollars level.

I like that setup as well.

If you look at the map, did it cross down here right as we started to break down, like just before

we reached the zero level almost and then rolled over again after crossing yet another reason to sell.

The.

Squeezing of the market is a subtle difference, and you need to know the difference between that,

that's a squeeze.

That's a consolidation.

Again, you want to see it stretched out.

A lot of this, just as with the squeeze, you know, the consolidation is about letting the market

tell you which way to go.

Now, the examples I've shown you all.

Suggests that in history, shows us statistically shows us that typically consolidation means continuation

of the previous trend, but by letting the market do it first, you can profit without taking unnecessary

risks.