Bollinger Bands
Also called: Bollinger squeeze, band width
A 20-period moving average with bands two standard deviations above and below it, widening and narrowing with volatility.
Band width measures recent volatility. Touching a band is not a signal: prices can ride the upper or lower band throughout a strong trend, and the idea that 95% of prices stay inside assumes normally distributed price changes, which markets often violate.
Learn more in these lessons
- Bollinger BandsHow are Bollinger Bands built, and what does it mean when price touches a band?
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