How to use Bollinger Bands
Bollinger Bands make volatility visible. A center line sits between two bands that widen and narrow with volatility, helping you judge whether price is "stretched" and "active".
The three lines
By default: the middle band is a 20-period average; the upper/lower bands are the middle ± 2 standard deviations. Price spends most of its time inside the channel; a bigger standard deviation means a wider channel and rougher volatility.
Squeeze and expansion
This is the most useful read: a squeeze (visibly narrow channel) means volatility is contracting and the market is coiling — often before a move; an expansion (bands flying apart) means volatility is rising and a trend may be starting. Confirm the direction after a squeeze with a breakout and volume.
Common traps
- Touching the upper band isn't "sell", lower isn't "buy" — in strong trends price rides a band.
- Bands show relative volatility, not direction — pair with trend tools.
- Middle = 20 MA, bands = ±2 standard deviations.
- Squeeze = coiling, expansion = volatility rising — the core reads.
- Touching a band isn't a signal; strong trends ride the band.
Stack Bands with MAs and volume on desktop for the full picture.
Download the desktop app, free