Bollinger Bands

Bands drawn a set number of standard deviations above and below a moving average.

In plain English

The usual default is a 20-period average with bands two standard deviations away. They widen when volatility rises and narrow when it falls; touching a band is not a signal by itself.

Example

Bands narrowing sharply show volatility contracting, without saying which way it will expand.

Technical Analysis

See also

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