What Are Bollinger Bands and How Are They Read?
What are Bollinger Bands?
A volatility indicator made of a 20-period moving average in the middle and two bands placed two standard deviations above and below it.
What does band width say?
When the bands narrow, volatility is low and a sharp move may follow the squeeze. When they widen, volatility has increased.
Touching the upper or lower band
A touch of the upper band is not a sell signal by itself; in strong trends price can walk along the band. In sideways markets a return to the average is more common.
Combine with other indicators
RSI divergence, volume and support/resistance levels reduce false signals.
Source note
John Bollinger developed Bollinger Bands; the default is a 20-period simple moving average with bands two standard deviations above and below, which widen when volatility rises and narrow when it falls[1].
Limits
The bands show volatility, not direction. This page is educational, not investment advice.
Frequently asked questions
- What are the default Bollinger Band settings?
- In the bands developed by John Bollinger, the default is a 20-period simple moving average with bands two standard deviations above and below[1].
- What happens when the bands widen?
- The bands widen when volatility rises and narrow when it falls[1].
Related guides
Sources
- Bollinger Bands. StockCharts ChartSchool. Accessed: 2026-10-22.