What is Bollinger Bands?
Bollinger Bands consist of a moving average with upper and lower bands set 2 standard deviations away — measuring volatility and identifying potential breakouts.
Formula
Upper Band = 20-SMA + 2σ, Lower Band = 20-SMA - 2σ
How to Interpret
Price touching upper band doesn't mean 'sell' — it indicates strong momentum. Band squeeze (narrowing) often precedes significant moves.
Typical Ranges
95% of price action occurs within the bands. Breakouts beyond are significant.