What Bollinger Bands shows
A 20-period average with a band two standard deviations above and below. The bands widen when the market is volatile and tighten when it is quiet.
Indicator guide · Bands and channels
Bollinger Bands: what it shows, settings and how to read it.
A 20-period average with a band two standard deviations above and below. The bands widen when the market is volatile and tighten when it is quiet.
How it is calculated
The middle line is a 20-period simple moving average. The upper and lower bands sit two standard deviations of price above and below it, so they widen and tighten with volatility.
Usual settings
Length 20 and 2 standard deviations. Some traders use 2.5 for fewer, stronger signals.
How traders read it
A squeeze (very tight bands) often comes before a big move. In a range, touches of the outer bands tend to fade back to the middle.
Where it fails
In a strong trend price can ride the upper or lower band for a long time; a touch alone is not a signal.
What to combine it with
RSI to confirm that a touch of the band is really stretched, and Keltner Channels to spot the squeeze.
Try Bollinger Bands on a live chart
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Bollinger Bands. Click its name on the chart to change the settings. It is free for every member.
More in "Bands and channels": Keltner Channels · Donchian Channels · Ichimoku · All 25 indicators
Questions
Frequently asked questions
What is the Bollinger Bands indicator?
A 20-period average with a band two standard deviations above and below. The bands widen when the market is volatile and tighten when it is quiet.
What are the best settings for Bollinger Bands?
The usual settings are: Length 20 and 2 standard deviations. Some traders use 2.5 for fewer, stronger signals. No setting is best in every market, so test a change on past data before relying on it.
Is Bollinger Bands reliable on its own?
No single indicator is. In a strong trend price can ride the upper or lower band for a long time; a touch alone is not a signal. Most traders use it together with: RSI to confirm that a touch of the band is really stretched, and Keltner Channels to spot the squeeze.
How do I add Bollinger Bands to a chart for free?
Sign in, open Genni Charts, press the "ƒx Indicators" button above the chart and choose Bollinger Bands. Click its name on the chart to change the settings. It is free for every member.
This page is education, not investment advice. Trading involves substantial risk of loss. Read next: Trading indicators · Trading strategies · Candlestick patterns