I looked through several sources on Bollinger bands and I do not see clear recipes of their usage. Wikipedia says "The use of Bollinger Bands varies widely among traders. " QSE discussion seems also says "Just like everyone else that's been down this path, you'll have to prove this stuff to yourself. "
Question Would you be so kind to share with me your experience - how (and when) do you use them ? what are the outcomes? and what idea stands behind it ?
Let me say what I understand - if market is in horizontal trend, i.e. we can think of it as price = Const + noise. Then it is reasonable to expect that if in some moment price is quite big, then it it will return to mean - so we go short at big price and sell in future, when it returns to trend(=Const).
However if we have positive trend: price(t) = A*t+B + noise, it very much depends on how fast noise is changing, how big is A, and volatility of noise. Since if trend is go ups very quickly even if the price is far from trend and it will return to trend some time after at the moment of return it will be much high than it was before (because of trend), so if you go short - you will lose.