Definition. An indicator made up of a moving average and two lines set a multiple of the standard deviation away from it. Developed by John Bollinger in the 1980s.
How it works
In the classic version it's a 20-period average with lines 2 standard deviations away. The bands widen as volatility rises and narrow as it falls.
Example
A long squeeze of the bands means a period of low volatility, which often precedes a bigger move.
What to watch out for
Touching a band isn't a reversal signal. In a trend, price can “walk” along the band for a long time.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
