Bollinger Bands
BB
A moving average with ±standard-deviation bands; a squeeze signals low volatility, a bulge rising volatility.
How to read it
Bollinger Bands wrap a moving average with an upper and lower band set a number of standard deviations away. The bands widen when volatility rises and squeeze together when it falls. Price spends most of its time between them.
Trading signals
A squeeze (very narrow bands) often precedes a breakout — watch which band price closes beyond. Tags of the outer bands in a range can mark overbought/oversold, but in a strong trend price can "walk the band", so don't fade every touch.
Parameters
Bollinger Length sets the middle MA and the window the standard deviation is measured over; MA Type changes its weighting. A longer length gives calmer, wider-reacting bands.
- Bollinger Length
- Bars in the moving average the bands are built around.
- Bollinger MA Type
- Averaging method for the middle band (SMA, EMA, …).