rajen...i think more important is that 3 point in the above graph....that point defines the gimme bar....the first pic shows gimme bar (which has touched the bb), the second pic shows the gimme bar (which has not touched the bb)...but because the price bar closed higher than the open ...its a gimme bar (provided its previous bar has touched the lower bb with prices continously falling)...am i right....!!
All in short are giving only giving one clue,
When price touches the lower bb and the price closes above its open, then that bar is GB and the vice versa for the upper BB
Also it also tells if the price touces the lower bb and the price closes below its open the thats not the one we need to consider.
We need to consider the bar which has touched and then moved away to the opposite direction.
Here there are two scenarios,
1. Price goes down, touches the BB but the price bar has close below its open, so its still the red bar and the next bar moves up and doesnt touches the BB but move is on opposite side, which means the close is above the open. then that bar is considered as GB
2. Price goes down, touches the BB and the price bar has close above the open, then that bar is considered as GB
In both the scenarios, the GB may give wrong trades, to avoid that, we wil use the resistance and support level created by the previous pivots.
When the resistance or support level also touches this bar which has touched the BB, then that bar gives us a strong indication for reversal or profit booking or for entry.
