Bollinger Bands: how wide is the range?

A band around a moving average that widens when price is volatile and narrows when it is calm.

Illustration on a made-up price series, not market data. Hypothetical, for education only.

What it measures

The middle line is a 20-period average. The bands sit two standard deviations above and below it, so most prices fall inside them.

How to read it

Touching the lower band means price is low relative to its recent range. It does not mean it must bounce.
Narrow bands (a squeeze) mean low volatility, which is often followed by a bigger move in either direction.
In a strong trend price can walk along one band for a long time.

A common mistake

Assuming price always returns to the middle line. It can ride a band for weeks.

Check yourself

1. Where are Bollinger Bands drawn? 2% above and below price. Two standard deviations above and below a 20-period average. At the previous high and low.

2. What do very narrow bands (a squeeze) mean? A sell signal. The market is closed. Volatility is low.

3. In a strong uptrend price can ... walk along the upper band for a long time. never touch the upper band. must return to the middle line immediately.

Try it

Run the Bollinger Bounce template, then the Supertrend Follower, on the same asset and compare how each handles a strong trend.

Open the app

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Educational content. Not investment advice. Past or simulated results do not predict future results.