During a low-volatility period, tightening the bands increases the likelihood of a significant price move in either direction. This could only be the beginning of something much bigger. Be on the lookout for a false move in the opposite direction that reverses before the true trend begins. Volatility increases when the bands diverge significantly, indicating the end of a trend.

Prices often bounce around inside the envelopes of the bands, touching one before moving on to the next. You can use these fluctuations to determine where potential profits can be found. When a price rises off the lower band and crosses above the moving average, the profit goal switches to the higher band.

During strong trends, prices can exceed or hug the band envelope for long periods of time. You should conduct additional research if your momentum oscillator reveals divergence to determine whether you should take additional profits.

The importance of indicators is to give a picture of what's going on in the economy, usually from a macro-perspective. It is an important tool for businesses and policymakers to understand the current state of a country's economic situation. They provide a shortcut to understanding the performance of an economy and how it relates to other countries. The most common indicators are inflation, unemployment, GDP per capita, and trade balance.