Bollinger Bands
Statistical envelope around a moving average at ±2 standard deviations. Volatility + extreme zones.
Neutral
Difficulty: ●●○○○
Reliability: 7/10
Created by John Bollinger (1980s). Three lines: SMA(20), SMA + 2σ, SMA - 2σ.
Key signals
- Squeeze: bands very tight → low volatility → breakout imminent (direction unknown)
- Upper band touch in uptrend: normal continuation, NOT a sell signal
- Band exit: rare event, often followed by mean reversion
- Divergence price vs band: potential reversal signal
Classic trap
"Price touches upper band so I sell" is the most common mistake. In strong trends, price hugs the band for weeks.
Combinations
BB + RSI or BB + volume = much more reliable than BB alone. Bollinger himself recommends always combining.
When to look
Any timeframe, any asset. Particularly effective during ranges.
Confirmation
Combine with RSI or volume. A squeeze alone doesn't give direction.
Also called: Bollinger, BB, bandes statistiques