Starting an Arcade Business – It’s Fun, Entertaining, and Profitable!

You should consider Starting an Arcade Business for public entertainment if you enjoy entertaining and amusing people! You can set your cash registers roaring by providing loads of interactive games, computer games, video games and all kinds of electronic amusement amenities.

This is a fun and family entertainment business. Youngsters and young adults just want to chill out and get their adrenaline pumping and amusement arcades are just the environment. If you are looking for self-employment options that will earn you a stable and profitable income you need to consider the arcade business. Before Starting an Arcade Business you need to check out the local zoning laws.

Estimated start-up costs:

$10,000 to $50,000.

Financing Sources for Starting an Arcade Business:

Bank & Credit Union Loans

Angel Investors

Business Plan needed when applying for loans

Marketing Methods and Tips:

Remember that you are competing with home versions of all these games. For that reason you need to do something to draw them to your Arcade rather than remaining at home to play. Think up some catchy name for your arcade business. One way to draw customers is by offering exciting, fabulous and unique prizes on winning particular games!

Advertising :

Place ads in local newspapers

Yellow Page advertising

Local Radio Stations

Distribute flyers at local clubs, super markets, etc.

Internet website

Essential Equipment:

Vending machines for food, candy and soda

Coin or Token Change Machines

Tables & Chairs

Arcade Games of all types and varieties

Recommended Training, Experience, or Needed Skills:

You don’t require any kind of formal or professional training for Starting an Arcade Business. It would be helpful to have some technical knowledge on repair and upkeep of the games. However, you can outsource for repairs and upkeep. Basic business skills would be helpful, but you can learn from books or business plans you can purchase.

Income Potential:

The income potential is dependent upon a good location. If you locate the arcade properly, you can make upwards of $100,000 a year. Without a proper location you will probably have little chance of success.

Target Market:

The biggest target markets for your arcade business are kids, teens and young adults.

Success Tips:

The biggest success tip for any arcade business amateur would be to promote your gaming parlor in a big, big way. You have to employ clever business and marketing techniques to attract customers. After that word of mouth will work the best.

You need to create the perfect ambiance that will help youngsters and their parents to have fun and relax! Revamp your arcade décor from time to time including the latest games and exciting prizes!

Seven Top Differences Between Entrepreneurs and Businessmen

Entrepreneurs and businessmen are most of the time interchangeably used. I too have been guilty of using one or the another at times. However, I feel that there is a significant difference between the way entrepreneurs run their venture and businesses run their operation. Entrepreneurship is all about assuming risk and accepting whatever rewards or failures that occur subsequently. A businessman on the contrary follows a well known path and takes lesser risk than an entrepreneur.Let us look at some of the points where entrepreneurship is different from running the business.

  1. Entrepreneur are in the business of creating something new
  2. The purpose of business is to recycle the products. Hence business is more like trading. By trading I mean purchasing goods from one place and selling at the other. It may also involve manufacturing at some step but the fundamental principal remains the same.
    Entrepreneurs create something new. They identify a problem and work to create innovative solutions that help reduce or eliminate problems. Even if they do trading, they will apply innovative methods to it.
    Let me give you an example. If an owner of retail chain is adding internet sales as one of his channel, he is just being a businessman trying to find new ways of getting more business. However if he goes an creates an innovative product that never existed before, he is being an entrepreneur. Here, he has taken the risk upon himself.

  3. Entrepreneur’s “Business” is unique
  4. An entrepreneur will not work in areas where there is already a crowd. He will use his scarce money to explore new. He will for example, go for new channels of sales( internet, m-commerce etc), innovative products ( a new software), innovative marketing techniques( viral marketing) etc. He side steps the market that is too competitive and works in a niche area.

  5. Entrepreneur puts his own money first
  6. Since people are not convinced of his ideas, entrepreneur has to put his money on the line first. He has to show that a market exists for the products he is creating. Then only he can get external finance. This is in contrast to a regular business, where it is known that market exists and hence investors are more willing to invest in such businesses

  7. Entrepreneurs working with new innovative products have more breakout chances
  8. If the risks are high, so are the rewards. A successful entrepreneur reaps more monetary benefits than his business counterpart. A regular business with lower risk will get lower returns on the capital it invests. The surety of making money in regular business is more than that of entrepreneurship though.

  9. Entrepreneurs experience more uncertainty than regular businesses
  10. Entrepreneurship is definitely more riskier and uncertain than conducting an ordinary business. An entrepreneur faces the question almost daily about success of his product, cost of developing the product, customer’s adoption, team motivation and everything else. There is uncertainty and un-evenness of sales.
    A regular business however has more or less regular sales and is less uncertain than an entrepreneurial venture

  11. Entrepreneurs share business ideas with team
  12. Entrepreneurs build on vision and they cannot do it alone. So an entrepreneur constantly needs to remind his team and himself about what they are creating and why it will work. An Entrepreneur has to always look for new ways to motivate the employees. The roles of employees change frequently based on the perceived business conditions
    In a business however, the roles of employees are same throughout the life time of the business

  13. Entrepreneurs share the success with the team
  14. Entrepreneurs do not have much cash to offer. Hence they offer equity to their employees. When the venture is successful everyone who has a shares becomes rich. One of the prime example is Infosys technologies in Bangalore. It has created so many millionaires just by distributing equities to the founders and employees of the company.
    A business on the other hand is less open to sharing equity with employees and would pay higher salaries to compensate for it.

I nowhere say that businesses cannot be entrepreneurial or vice versa but that there is a significant differences between the way a entrepreneurial venture and a business works. A business however can become entrepreneur by doing something innovative while entrepreneur can reduce the uncertainty by being more like a business.

Life In The Middle East

When someone lives in places unknown to him or her, lots of observation, learning and adjustment will have to take place. Adapting ones self to the new environment, customs, traditions and others are important factors to living a life other than you had known. If a person lived in the Middle East or Gulf State countries for more than a decade, there will be lots of things and events that could have happened. Things that were amazing, events that were scary and most of all peaceful living.

These three things come into someone’s mind who had lived in the “Middle East or Gulf States”. It is a place composed of different countries/ Gulf States with amazing geographical sights and views different from other places. For their dress code, most men usually wear white trouser or serwal, ghutra (ghutra is usually checked red and white or plain white used to cover their head) and uggal which is the black ring used to hold the ghutra or head cover. They put on the “Dishdasha,” usually white, grey or black, with straight cut pattern. It is worn on top of their shirt or serwal. Serwal is like an underpant. The women wear the normal dress for women then wear the “Abaya.” It is a black loose dress with embroideries or decorative patterns around the neckline, as well as at the side and at the bottom of the dress. It is worn on top of their dress and a veil to cover their faces.

For food, most of them eat food namely shawarma, mashboos, biryani, harris, fish and rice. When it comes to greetings, Arabs have different ways of speaking Arabic. Their Arabic languages differ from one Arabic country to another. Arabic countries like Egypt, Morocco, Libya, Algeria,Tunisia, Lebanon, Palestine, Sudan, Iraq, Gulf States such as; Saudi Arabia, Kuwait, Qatar, United Arab Emirates,Bahrain and Oman) speak different Arabic languages but there are Arabic countries that can understand each other with the common Arabic language being spoken by most Arabic. For example: Greeting like: “Salam alaykum” and the response is “Alaykum salam” is being used by most Arab countries. But when you say How are you? the common Arabic phrase is “Kephalak” (address to a man, “Kephik” (address to a woman), the response will varies accordingly. In Qatar it is “Zein” or “Mamnoon”, In Egypt it is “Tammam” or “Kuwaisa” for woman, “Kuwais” for men. In Iraq, How are you in Arabic will be “Slonik ente (address to a woman), “Slonek enta” address to a man. Arabic scribble or write their words starting from right towards left. They count numbers like: one-wahad, two-etnein, three-talata, four-arba, five-kamsa, six-sita, seven-sabah, eight-tamanya, nine- tisaa and ten- ashara etc.

The sands, sand dunes, deserts, camel, donkeys, Mediterrenean Sea, Nile River, etc. relates as parts of Middle Eastern terrain. The Pyramid in Egypt was unbelievable too. You can see the size of the blocks of stone which were huge and just imagine how they were laid one on top of the other to build a Pyramid. Riding a camel is very exciting and at the same time scary. When it comes to religion, Islam is dominantly practice throughout the Arab world. You can hear the “Call to Prayer”from sun break to sundown in a loud speaker from the Mosque starting with a phrase “Allah Akbar…….” ( God is Great).

When people hear the Call to Prayer, you will start seeing Muslim people leaving their job or going out of their homes proceeding to the Mosque to gather and pray. The prayer last for 5 to 10 minutes. When they praying they have to face the Quiblah( a direction towards Mecca in Jeddah). In the hotel you will find rooms designated only for praying, whether for guest or employees. During the period of Ramadan, Muslim fast and abstain from food and water from sun break to sundown for 30 days. It is very important that expatriates who are non-Muslim respect the people who were fasting by not showing themselves eating or drinking and even smoking within their sight. Muslims call their “Bible,” Holy Quran. It is well respected and handled with utmost care.

Arabic countries and Gulf States have multi national expatriates. Most of them are contract workers from the category of oil drilling contractors, builder contractors, laborers, hotel managers and workers, doctors, nurses, accountants, technicians, teachers and many others. Contract workers usually comes from India, Sri lanka, Philippines, Pakistan, Bangladesh, Nepal, Africa, Egypt, Europe, England, Russia, U.S. and others are minority. Most Arabs that I met were polite, reserve and educated. Most children in the Gulf Countries were sent outside for higher education like Europe, America and others. It is important that when you live in the Middle East or Gulf States, that customs, traditions and religion are observed and respected.

Role of Stock Market in Financial System

The stock market plays a crucial role in the financial system. It is considered as one of the best ways to increase their funds. But before you make any investment into the stock market, you should know how to get started. It may turn out to be a profitable affair as long as you know the tricks of the trade. To start with, you must have an account in your preferred brokerage.

You need to pay the corresponding transaction fee as they will be acting on your behalf. Primarily the stock market offer liquidity which empowers the financiers to trade efficiently on their securities. This is regarded as one of the best features of stock market investment. Also the exchange rates are vital in financial dealings as it eradicates the risk to personal purchaser or supplier.

Many pioneer economists believe that the role of stock market has opened new avenues in terms of financial as well as the economic growth of a country. Today with easy access to internet you can buy or sell instantly with online stock trading system. Although stock market can boost your financial stability but you should never overlook the risks attached to it.

Basically it’s a matter of sharp market observation and speculation. The ever fluctuating stock market can leave you high and dry. You need to understand how to minimize the risks on your investments. Proper financial guide, market research, expert advice can help you to deal with the risks involved to a great extent.

Entrepreneurship In The 21st Century

Many definitions of entrepreneurship can be found in the literature describing business processes. The earliest definition of entrepreneurship, dating from the eighteenth century, was deemed to mean an economic term describing the process of bearing the risk of buying at certain prices and selling at uncertain prices. Later, the term broadened to include the concept of bringing together the factors of production. This definition led others to question whether there was any unique entrepreneurial function or whether it was simply a form of management. In more recent times, the concept of innovation was added to the definition of entrepreneur-ship. Innovation would blossom into many categories: Process innovation, market innovation, product innovation, factor innovation, and organizational innovation. The most recent definitions have described entrepreneurship as involving the creation of new enterprises whereas the entrepreneur is the founder.

Considerable effort has also gone into trying to understand the psychological and sociological underpinnings of entrepreneurship. These studies have noted some common characteristics among entrepreneurs; most entrepreneurs have a need for achievement, perceived locus of control, orientation toward intuitive rather than logical reasoning, and a risk-taking propensity. In addition, many have commented upon the common, but not universal, thread of childhood deprivation, minority group membership and early adolescent economic experiences as typifying the entrepreneur.

At first glance then, we may have the beginnings of a definition of entrepreneurship. However, a detailed study of both the literature and actual examples of entrepreneurship tend to make a definition more difficult, if not impossible to precisely define.

Consider, for example, the degree to which entrepreneurship is synonymous with bearing risk, innovation, or even founding a company. Each of the terms described above focuses upon some aspect of some entrepreneurs. If this holds true, then the likes of Thomas Watson of IBM or Ray Kroc of McDonald’s will never qualify; Few scholars would seriously argue that these individuals were not entrepreneurs.

Although risk bearing is an important element of entrepreneurial persona, many entrepreneurs have succeeded by avoiding risk by seeking others to bear said risk. As one extremely successful entrepreneur has said, “My idea of risk and reward is for me to get the reward and others to take the risks.”

Creativity is often not a prerequisite for entrepreneurship either. Many successful entrepreneurs have been good at copying others and somehow improve on the idea; they will be remembered for innovating one part that was essential to a product’s success.

Many questions about the psychological and social traits of entrepreneurs still arise. How is it that successful and unsuccessful entrepreneurs can share the characteristics commonly identified? Furthermore, certain studies often show decreasing ‘entrepreneurship’ following a successful venture for the entrepreneur. This tends to disprove the centrality of character or personality traits as a sufficient basis for defining entrepreneurship.

Thus, we are left with a range of factors and behaviors which characterize entrepreneurship in some individuals. All of the above tends to reinforce the view that it is difficult, if not impossible to define what an entrepreneur is. The word itself can be best used in the past tense to describe a successful business person.

Measuring Entrepreneurship

Despite the murkiness of the current finding concerning the entrepreneur, there still remains a powerful impulse, particularly amongst enterprise development practitioners, to measure entrepreneurship in some way. These measurement attempts can range from simple checklists through to complex and detailed computer programs. The need for a definition and measure of entrepreneurship is driven by the notion that it is the entrepreneur who is the agent of success at the launch of any business.

He or she is the person who perceives the market opportunity and then has the motivation, drive and ability to mobilize resources to meet demand. The major characteristics of entrepreneurs that have been listed by many commentators include the following.

” Self confident and multi-skilled.

” Confident in the face of difficulties and discouraging circumstances.

” Innovative skills. Sees opportunities often invisible to others.

” Results-orientated. Requires the drive that only comes from achieving the goals they have set for themselves.

” A risk-taker. Often the successful entrepreneur exhibits an incremental approach to risk taking, at each stage exposing him/herself to only a limited, measured amount of personal risk and moving from one stage to another as each decision is proved.

” Total commitment. Hard work, energy and single-mindedness are essential elements in the entrepreneurial profile.

However, two warnings need to be attached to this partial list of entrepreneurial qualities.

First, the selecting individuals for enterprise development training by such a set of attitudes and skills in no way guarantees business success.

Second, the entrepreneurial characteristics required to successfully launch a business are often not those required for a business that experiences growth. The situation becomes vastly different once it grows to any size, making the skill set a different organism. The role of the entrepreneur needs to change with the business as it develops and grows, but all too often he or she is not able to make the transition.

Visionaries and Managers

In new and emerging businesses, the person who starts the business is often an entrepreneur or a visionary.

The visionary who starts a business with a fresh idea — to make something better or less expensively, to make it in a new way or to satisfy a unique need — is often not primarily interested in making money. The visionary wants to do something that no one else has done because they can; it is interesting and exciting, and thus meeting a need. Once the business begins to have some success, the nature and processes change. This ultimately requires a different skill set than the person with the vision.

At this stage, the infant business experiences its first set of challenges:

” How does the visionary entrepreneur transfer the skills and the inspiration that made the little enterprise a success into something larger?

” How does the business deal with cash flow constraints?

” How does it obtain the legitimacy necessary to enable it to borrow?

Often, the visionary is not interested in these issues. Visionaries are notoriously poor at supervising staff, negotiating with investors, or training successors. The business now needs a professional management focus, which calls on a different set of skills, to manage and sustain growth, that are distinct from the skills necessary to start an enterprise and promote a vision.

Applying management skills allows the adolescent enterprise to continue to do well, but the business culture begins to change. The emphasis of management is structure, policies, procedures and most important, profitability. Therefore, the business reaches the next challenge: The maturing enterprise now requires a management structure or governance to create checks and balances and to ensure that the management focus does not become too powerful and overwhelm the entrepreneurship necessary to create rapid growth and access new markets.

Businesses in emerging industries go through these three stages characterized by vision, management, and governance. Upon developing into an institutionalized company with appropriate governance structures, the business encounters a new set of challenges that are common to all industries:

” How does the business preserve its vision?

” How does it balance growth, risk, and profitability?

” How does it establish a governance system that holds management accountable without undermining its independence and flexibility?


This business development cycle described above is common amongst successful businesses. The cycle itself raises the issue of what to focus on when attempting to select a business idea to take part in a program such as the TKMPK. The real danger for those involved in selection activities is that of selecting entrepreneurial qualities over managerial skills. This may thereby condemn the business to uneven growth, poor management and ultimate failure, as the enterprise does not respond adequately to new market and trading conditions. A further danger is attempting to select people over ideas.

The focus of any predicative element in the selection process, therefore, needs to be on a balance of both entrepreneurial and managerial qualities. And the major determinant in selecting a participant for business management training must remain the business idea itself.

Micro Entrepreneurs

Micro entrepreneurs are the owners of small businesses that have fewer than five employees and have startup costs of less than $35,000 and annual revenue of less than $100,000. There are nearly 21.5 million micro entrepreneurs in the U.S. Examples of micro entrepreneurs are owners of bakeries, beauty parlors, child care facilities, repair shops, arts and crafts shops, painting businesses, contracting businesses, family-owned shops, auto body shops, small-scale restaurants, and small-inventory trading businesses.

Micro entrepreneurs face many hurdles in getting startup financing, and they sometimes lack the skills necessary to manage the financial aspect of their business. As a result, many micro entrepreneurs cannot grow and develop their business beyond a micro enterprise. Various micro enterprise development programs have helped micro entrepreneurs achieve great success and growth. These micro enterprise development programs have immensely helped micro entrepreneurs who lack collateral needed to secure a loan or those who have low or no credit by providing them with training, support, help in developing a solid business plan, and assistance in building their businesses. Successful micro entrepreneurs have contributed much to society by creating wealth, economic assets, and jobs.

How To Become A Micro Entrepreneur

It is essential to study the market thoroughly and understand that market’s customers before deciding on the type and kind of product or service to be offered.

Here are some suggestions:

Work out a sound business plan by doing extensive research and seeking help from the various micro enterprise development programs.

Make arrangements for the startup capital by using savings, opting for a micro loan program, or applying for a grant.

Do extensive market research, get the necessary training and skills required, and learn how to use technology to help run your business easily.

Study the competition and analyze how you can better them.

Get a good retail space to run your business as well as decide on the price, making sure it is right and has a profit margin; decide how to utilize the profit, whether you want to save it or reinvest and expand your micro business.

Make sure that the quality of the product is never compromised and that your customers are happy, ensuring customer retention.

Assistance for Micro Entrepreneurs

Micro entrepreneurs in the U.S. are in need of training and skill development workshops as well as help in utilizing technology to help run their business. Some micro entrepreneurs need access to easily available funds for startup and growth. In order to encourage more people to become micro entrepreneurs, state, federal, and private sectors should make available ample funding for such enterprises.

With a little effort, you can find firms that sell their services as well as products to help run successful businesses. You can even seek professional help to arrange business credit for micro enterprises.

Importance of Acquiring Knowledge in Business

Knowledge is a resource referred to as knowledge capital or intellectual capital in a business. It is the essential element that allows businesses to operate in the market sector. The knowledge of the organization is within the human capital of the organization. Despite the rapid global changes, knowledge addresses key issues that can lead to successful management within organizations and can be used as leverage in collective bargaining of existing knowledge and creating new ones.

Understanding customers’ needs and the business environment is a huge interface of information. If a market research is done, then the knowledge of the market can be integrated to the target clients specifically in developing new products/ services and improving existing ones.

Having knowledgeable staff sets the business on a competitive edge because it helps the business run more smoothly and efficiently. For example, knowing customers’ needs and feedback to develop products or services to ensure that their needs are met.

Moreover, monitoring and reporting the changes in the business world is also needed. Knowledge in building networks by professional associations and trading partners can provide an easy way to find out what the competitors are doing and to see the latest innovations in the market sector. Making product research and development is a vital source of knowledge that can help in retaining competitive edge.

Furthermore, using knowledge more effectively can improve goods/services offered. It can increase customer satisfaction. Knowledge of the market can result better awareness of what customers want and what the staff require. Knowledge or information sharing can also improve staff productivity.

In order to manage the utilization of knowledge, there is a need to build a culture in which knowledge is valued across the business to retain the competitive advantage and understand the characteristics of the target market.

Knowledge of the business can help entrepreneurs evaluate and understand the needs of potential customers and develop products/ services that meet customer satisfaction since possible customers show different behavior patterns and preferences such as brand loyalty and the like.

Through knowledge acquisition, business supply chain management is visible everywhere and anywhere. It leads to faster growth and development. It also impacts the competitive advantage and become strategically important to understand knowledge transfer in a more predetermined fashion. The sustainability of organization depends largely on the acquisition of knowledge with a continuous learning process.

Hence, knowledge is vital to any organization because it empowers entrepreneurs to take informed decisions, improve services, produce better marketing decisions and increase profitability.

How I Became A Successful (Part-Time) Import/Export Agent

Several years ago, when I was invited to sit on the board of Wade World Trade, an educational institution established in 1946 to help entrepreneurs become import/export agents, I thought I would try it out for myself. I have to say that although I am not a natural entrepreneur (I hate anything which smacks of ‘selling’) I have never regretted the decision.

My first challenge was to find something to import or export. After much thought I decided I had to pick an area I was interested in anyway so I chose food. Since ‘artisan’ food producers are not very commercial it was a good decision. They find it easy to sell their products locally but tend to be hopeless at marketing overseas. I soon negotiated agency agreements with half a dozen companies for a range of related products – jams, chutneys, oaten biscuits, relishes, tea, hot chocolate and chocolate. All were manufactured (or at least packaged) in the UK and none had ever been exported.

The next step was finding possible buyers. My approach was to send an email containing photographs of the products I had on offer to – literally – thousands of buyers in Europe, the USA and Commonwealth countries. In the email I offered a ‘sample’ pack for the cost of postage. I also sent out about 2,000 mail shots. All together I must have spent close to £1,500. But I received requests for 70 sample packs and from this I obtained 15 regular customers. With three months I had made back by £1,500. Within a year I was generating a very nice income. It probably absorbs about 8 or 10 hours a week of my time BUT the beauty of it is that I can work at it largely when it suits me – in the evenings and weekends.

How to get into the lucrative world of Import/Export without a penny in capital and without leaving home.

If you would like to know more about becoming a successful Import/Export Agent then why not visit the Wade World Trade website ( If you decide to take their course as a reader of the Power Report you will be entitled to the full £100 discount.

Know These Potential Risks and Limitations of Candlestick Charting Unknown to Many Traders!

Candlestick charts is a visual representation of the battle between the bulls and the bears that takes place in the market. It takes time for this battle to take shape. Candlestick patterns on the very short timeframes used for scalping and some other day trading strategies may not give signals that can be properly interpreted and traded.

In the last decade electronic trading has become highly popular. What this means is that significant volume of the trading takes place outside of the regular market hours. This trading can cause patterns that don’t reflect the full picture to appear on a candlestick chart.

For example, stock ABC trades on NYSE. NYSE officially opens at 9:30 AM EST for trading. Stock ABC open price is $60 per share. However, this stock had been trading on the electronic network in the pre-market hours as low as $59. Now the open on the NYSE may not be a true reflection of where the stock had been trading initially on that day.

What this means is that the open recorded on the candlestick chart is not accurate. Now, suppose the stock ABC never trades down to $59 during the day. So, the low on the candlestick chart may not be an accurate depiction of the day’s price action.

So, electronic trading makes these charts somewhat inaccurate. Couple this with the fact that on short timeframes, candlestick charts are not very accurate. These charts are good for timeframes of 1 hour and above. Just keep these two limitations of candlestick charts.

Apart from that candlestick charting is a powerful tool in the hands of an experienced trader. When an experienced trader combines these charts with technical indicators, this combination can produce highly accurate trading signals.

Candlestick patterns can be a good buy and sell signal when combined with a technical indicator like the RSI or the stochastic. There are simple as well as complex candlestick patterns. Single stick candlestick patterns are easy to spot however, two stick and three stick candlestick patterns do not appear quite frequently but when they do, they are very accurate and can be highly profitable to trade!

Now Yahoo Finance is an excellent free resource that you can use to create candlestick charts for any stock by just entering the stock ticker symbol. You should play around with the options available for Yahoo Finance. This will help you to learn a lot of new things about candlestick charting.

Bollinger Bands Shocking Secrets

How do you measure the volatility in the market? Price volatility in the market is mostly measured with the standard deviation. Bollinger bands are technical indicators that plot the standard deviation of the price action. Two bands are plotted. One above and the other below the moving average. The period of the moving average is 20 mostly as this time period effectively represents the intermediate trend.

Bollinger bands may be applied to any market or security. Any timeframes from daily, weekly, monthly to intraday can be used. Primary advantage of using these bands is to check if the prices are relatively low or high

Bands will be narrow when the volatility in the market is low. These bands expand when the volatility in the market increases. This information can be especially useful to options traders as options prices are heavily influenced by the swings in volatility.

Now, prices can be within the band or outside the band. When prices are outside the bands, this is taken as a signal that the trend is most likely to continue. When prices are above the upper band, this is taken as a sign of strength in the market. However, when the prices are below the lower band, this is taken as a sign of weakness in the market.

Rapid and substantial price moves often tend to happen after the band tightens. Bollinger bands are often used in conjunction with other technical indicators to detect high probability trend reversal or turning points. The primary indicator that works best with these bands is the RSI (Relative Strength Index), MACD or the CCI ( Commodity Channel Index).

Now the recommended setting for these bands is two standard deviations above and below the moving average with the period 20. These bands will keep on moving close or away from the moving average as a function of the market volatility.

But sometimes, you want to trade a longer timeframe. In that case, 50 is usually used as the period for the moving average with longer trends and the standard deviation settings for the two bands should be increased to two and half standard deviations. In case of very short timeframes, the moving average period should be lowered to 10 and the standard deviation should also be decreased to one and a half for the two bands.

Trading these bands is one of the most powerful concepts that is available to any trader whethet stocks, futures, forex, options or commodities. As said before, these bands are traded in conjunction with other technical indicators. In case of the stock market, a period of 20 for the moving average is okay.

However, when prices touch these bands, it should never be taken as an absolute signal. It should only be taken on a relative basis and the price action needs to be confirmed with other technical indicators before trading on these signals.