Bollinger Bands
Three lines that wrap price action, widening when volatility rises and pinching tight when markets go quiet.
John Bollinger designed these in the 1980s. The center line is usually a 20-period simple moving average. The outer bands sit two standard deviations away, so they expand as price swings grow and contract as it settles.
A tight 'squeeze' often precedes a sharp move, though it doesn't say which direction. Price tagging the upper band isn't a sell signal by itself; in a strong uptrend it can ride that band higher for days. Read the bands with trend context, not in isolation.
Related terms
A measure of how sharply and how often a price swings, in either direction, over time.
Moving Average (MA)A line that averages price over a set period, smoothing noise to reveal the underlying trend.
Relative Strength Index (RSI)A momentum oscillator scaled 0 to 100 that gauges whether an asset has run too hot or too cold.
BreakoutPrice pushing decisively through a level it had been stuck below or above, often on rising volume.