Bollinger Bands are indicating the current volatility of the given instrument. They are calculated as the 2 standard deviations below (lower band) and above (upper band) of the simple moving average for the selected period. Widening bands indicate rising volatility and the narrowing bands indicate the decreasing volatility. The are many trading signals based on the Bollinger bands - the most popular is expecting the price to reverse if it touches either of the bands.
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