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How does Bollinger Bands analysis enhance forex trading?

Bollinger Bands measure volatility by plotting standard deviations around a moving average. Price near the upper band suggests overbought conditions, while near the lower band indicates oversold. Institutions use them to identify volatility compression before breakouts. Retail traders apply band squeezes and bounces for entries. Benefits: adaptability across pairs and timeframes. Risks: misinterpreting band touches as signals rather than context. Bollinger Bands work best when combined with trend confirmation or momentum. They visualize volatility, reminding traders that markets expand and contract in cycles—patience and context are key.