Bollinger Bands

A moving average with a standard-deviation band either side.

Formula

Middle = SMA(20); Bands = Middle ± 2 × σ(20)

How to read it

Touching a band is not by itself a signal: in a strong trend price walks along it. Bands squeezing together mark low volatility, which tends to precede a larger move.

How to use it

Measures how stretched a price is against its own recent volatility.

In Kereon

Charts · Superchart. Defaults 20 and 2 on the close. Population deviation (÷ N), Bollinger's own definition.

Also called: bollinger, bands, std dev bands.

Related terms

The whole glossary · Investing tools