What are Bollinger Bands?
Bollinger Bands
Forex Trading Glossary
Quick Answer: Bollinger Bands are volatility bands placed above and below a moving average. They expand during high volatility and contract during low volatility, helping identify overbought/oversold conditions.
What are Bollinger Bands?
Bollinger Bands plot a moving average with upper and lower bands typically two standard deviations away. They dynamically adapt to volatility.
Using Bollinger Bands
- Squeeze: Tightening bands signal potential breakout conditions.
- Mean reversion: Price touching outer bands often reverts toward the middle band.
- Trend confirmation: Walks along the bands indicate strong directional moves.
- Combine with oscillators: Filter false signals in ranging markets.
Related Terms
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