Bollinger Bands: Measuring Market Volatility
The Breakdown: A volatility indicator consisting of a simple moving average and two standard deviation lines. It expands when the market is wild and shrinks when it’s calm.
Why Traders Love It: It visually represents “high” and “low” relative prices, helping traders spot overextensions in a trend.
Pro-Tips for Success: Watch for the “Bollinger Squeeze.” When the bands get very tight, it’s the calm before a massive breakout. Be ready!
Link: Bollinger Bands Standard