Since BB can be used in a reversion to the mean strategy, the further away from the mean they are, the higher the percentage is that they will return to the mean. A standard deviation of 2 is generally used with BB, but I found that by extending the bands to 3 or 4 you can more easily see the extreme ranges and plan you strategy accordingly. Depending on the time frame, you'll find that the price will rarely reach certain bands so when they do it is a very good signal that a reversal is about to happen.
While trading, you can use the .5 values to judge when to enter. For example, if price reaches the 3 BB, you may want to put in a buy/sell order when it comes down below/above the 2.5 band. You should always use other indicators with BB but it does help in understanding extreme price movements better.
As with any indicator, back test it on your charts and see if it is something that works with your strategy. Trying looking at past trades that you took (both winners and losers) and see if the bands could have helped with your entries and exits. Good luck!
isofttouch
⋅
@MrWiggins, Thanks so much. I can see the picture clearly now 👍🏾
What is the use of multiple BB bands? Can I get a basic understanding of how it works?