Charts & technicals
Bollinger bands
Bands drawn a set number of standard deviations above and below a moving average.
How it works
The bands widen when volatility rises and narrow when it falls, so they visualise volatility as much as level.
Prices touching a band are sometimes read as extremes, though in a trend they can ride one for a long time.
Related terms
- Moving averageThe average price over a trailing window, used to smooth out day-to-day noise.
- VolatilityHow much an investment’s returns bounce around their average — the standard measure of risk.
- Standard deviationA statistical measure of how far values typically sit from their average.
- Technical analysisStudying price and volume history to inform decisions, rather than studying the business.
More in Charts & technicals
- Candlestick chart
- Bear market
- Golden cross and death cross
- Trend
- MACD
- Momentum
- Support and resistance
- Relative strength index
All 13 Charts & technicals terms · The full glossary, 433 terms
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