What are Bollinger Bands?

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Bollinger Bands are a popular technical analysis tool used in trading and investing to assess the volatility and potential price movements of a financial asset, such as stocks, forex pairs, or cryptocurrencies. They were developed by John Bollinger in the 1980s and have since become a fundamental component of technical analysis.

Bollinger Bands consist of three main components:


Upper Band: This is an upper boundary line that's drawn a certain number of standard deviations above a selected moving average (typically a simple moving average).
Lower Band: The lower boundary line, situated a specific number of standard deviations below the same moving average.