Joseph Ethan P2 Jenkins#64

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What is Bollinger Bands and how to trade with it?

Bollinger Bands are volatility-based indicators consisting of a moving average (middle band) and two outer bands set at standard deviations above and below it. When price touches the upper band, it suggests overbought conditions; when it touches the lower band, it suggests oversold conditions. Traders use Bollinger Bands to identify potential breakouts, trend continuation, or reversals. A common setup is the “Bollinger squeeze,” where narrowing bands signal low volatility, often followed by a sharp move. Bands also expand during volatile periods, guiding traders on risk. Bollinger Bands are powerful when combined with RSI or MACD for confirmation.