Bollinger Bands Explained

Bollinger Bands are a popular technical analysis tool used by traders. They consist of a middle band, which is usually a simple moving average, and two outer bands that are a certain number of standard deviations away from the middle band. These bands can help traders identify potential price reversals, overbought, and oversold conditions. By understanding how Bollinger Bands work, traders can make more informed decisions when it comes to buying and selling assets. The width of the bands can also provide valuable information about market volatility. When the bands are narrow, it indicates low volatility, while wide bands suggest high volatility. Bollinger Bands can be used in conjunction with other technical indicators to confirm signals and increase the accuracy of trading decisions.