Bollinger Bands (BB)

Bollinger Bands are a volatility indicator used to measure price fluctuations relative to a moving average. John Bollinger introduced them in the 1980s as a method to visualize market volatility and identify potential trading signals.

The Bollinger Bands consist of three lines:

• Middle Band: A simple moving average (typically 20 periods).
• Upper Band: Calculated by adding a certain number (usually 2) of standard deviations above the middle band.
• Lower Band: Calculated by subtracting the same number of standard deviations below the middle band.