Bollinger Bands
A volatility envelope: 2 standard deviations around a 20MA — squeezes, tags, and rides.
Core IndicatorsIntermediate 6 min read· Lesson 9 of 13 in Technical Analysis
Explanation & formula
Middle = SMA(20). Upper/Lower = middle ± 2 × 20-period standard deviation. Width self-adjusts to volatility: calm markets pinch the bands; wild ones balloon them.
Interpretation
Band TAGS are information, not signals: in ranges, tags fade back to the middle (mean reversion); in strong trends, price WALKS the upper band for weeks (the most misread behavior in TA). The SQUEEZE — bands pinched to unusual narrowness — precedes expansions; direction comes from the break.
Common mistakes
Auto-shorting every upper-band touch. First ask which regime you're in (Hurst/ADX help); band-walking trends will run you over. This platform's SQUEEZE_ON / SQUEEZE_FIRED conditions detect the compression setup directly.