Bollinger Bands are three lines — a moving average with a band above and below set by volatility. The bands widen when the market is volatile and narrow when it is calm. Price reaching a band can signal a stretched move, though not necessarily a reversal.
Forex Term
Bollinger Bands
Bands around price that expand and contract with volatility.
Example
When the bands squeeze tight, traders often expect a burst of volatility soon after.
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Forex and CFD trading involves significant risk of loss and is not suitable for all investors. Leverage can work against you. This content is educational and not financial advice — always do your own research.