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Technical indicator #5

Bollinger Bands

Bands drawn above and below a moving average to show how widely price swings. A very popular technical indicator in Japan.

Importance★★★

TypeTrend

Common settingsPeriod 20 and ±2σ are common

MT5（FUNDED7）Built in

1A 30-second chat

JUDITHSell at the upper line, buy at the lower line?

JADEA common misunderstanding. In a strong trend, price keeps moving along the edge of the bands. Trading against it just because it touched the edge means going against the flow

JUDITHThen how do I read it?

JADEFirst, the "width" of the bands. When they narrow, it's a heads-up that a big move may be coming

2Here's how it looks

The idea behind these lines is that about 95% of price moves stay inside this band

3Just check this

Band width

When the bands narrow, the market is building up energy. A big move often follows (the squeeze).

Band walk

In a strong trend, price moves along the edge of the band

Middle line

Same as a moving average. Use its direction to see the trend

4Reading basics

▲ Sign it may riseBand widens and price hugs the upper line → strong uptrend

▼ Sign it may fallBand widens and price hugs the lower line → strong downtrend

Technical indicators are calculated from past price moves, so they react a little late and can be wrong (false signals). The basic rule is not to decide from just one.

5Prop firm watch-outs

If you keep "selling because it touched the upper band," you can lose many times in a row on strong trend days and hit the daily loss line. A safe rule is not to trade against the trend on days when the bands are widening.

Daily loss line:5% of the previous day's closing balance. Unrealized losses count too (Official FAQ）

6How to show it in MT5

These are real screens from the Android MT5 app.Swipe sideways, or use the button below to go next

1 / 4

📱 Smartphone (iPhone & Android)

Tap the wavy-line icon (Indicators / インディケータ) at the top of the chart screen

Tap "f+" to the right of Main chart (メインチャート). (Indicators shown in the lower window open in a separate window automatically)

Tap "Bollinger Bands" in the list

Enter the numbers and tap Save (保存) at the top right

💻 Computer

In the top menu, click Insert (挿入) → Indicators (インディケータ) → Trend → Bollinger Bands

When the settings window (Parameters / パラメータ) opens, enter the numbers below

Tap OK to finish. You can also drag it onto the chart from the Navigator (ナビゲーター) on the left

🔧 Numbers to enter (common settings)

✓

Period

✓

Deviation

✓

Apply to (適用価格)

If you also want ±1σ or ±3σ, add the same indicator again on top and change only the deviation. For the steps, see the official help from MT5's developer (iPhone · Android · PC). Menu names may appear in English depending on your language settings.

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Common settings are general guides. How to show them depends on the chart software.