Bollinger Bands

Bollinger Bands are a technical analysis tool used in finance to gauge market volatility and potential price movement. They consist of three lines: a middle band representing the average price over a specific period, and upper and lower bands that are typically two standard deviations above and below the middle band. When the bands are close together, it indicates low volatility and possible upcoming price changes. When they widen, it suggests higher volatility. Traders use Bollinger Bands to identify potential buy or sell signals, interpret market trends, and assess whether an asset is overbought or oversold.