– Bollinger Bands is an independent indicator. However, it is recommended to use it in combination with other analysis tools. For example, Bollinger Bands can be used along with MACD and RSI.
The fact is that SMA — the basis of Bollinger Bands — attributes the same weight to all price data: old and new. Accordingly, the indicator may contain irrelevant information and give inaccurate signals.
– If you reduce the period of Bollinger Bands, the indicator will give more signals, but many will be false. If you increase the period, the signals will be less, but they will be more accurate. It is recommended to use the standard settings of Bollinger Bands, especially for novice traders.
