Bollinger Bands
Volatility, BB
Indicators, Technicals, BOLL; then a double click on its legend opens Inputs and Style. Recorded on the live chart without a log in.
- What it shows
A moving average with a band above and below it. The bands widen when the market is volatile and narrow when it is quiet.
- How it is built
The middle line is a simple average. The bands sit a set number of standard deviations above and below it.
Default: Length 20, 2 standard deviations.
- How traders read it
- Most price action stays inside the bands.
- A squeeze, with the bands close together, is read as a quiet market that may be followed by a larger move.
- Touching a band is not a signal on its own, in trends price can walk along it.
- History
Developed by John Bollinger in the 1980s.
John Bollinger, 1980s