Bollinger Bands Explained: What Do They Say About the Market?
Bollinger Bands are a type of technical analysis tool designed to help traders evaluate market volatility and potential price trends. Created by John Bollinger in the 1980s, this indicator consists of three lines: a simple moving average (SMA) in the center and two outer bands plotted above and below that average. The outer bands adjust automatically based on recent price volatility, which helps identify when a stock might be trading outside of its typical range.