Bollinger Bands

Bollinger Bands plot a moving average with two outer bands set a specified number of standard deviations above and below it, so the bands widen during high volatility and narrow during quiet periods. Price touching or piercing the outer bands is often read as a sign of an overextended, potentially exhausted move, while a sharp narrowing ("squeeze") is often read as a sign a bigger move is building. Bollinger Bands adapt automatically to changing volatility, which makes them useful across different market conditions without needing manual recalibration.