Bollinger Bands: A Trader's Essential Technical Analysis Tool

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One of the most well-known and frequently used indicators by traders and investors when reading charts is the Bollinger Bands indicator.
The application used in this video is: TradingView (free on the internet)
There are 3 important lines in this indicator:

Referring to the figure:

Referring to Figure 2:
There are 2 techniques for using the Bollinger Bands indicator:
Watch the full video for a more detailed explanation on how to use this indicator, where to buy and sell, and several examples based on real charts. On our website, you can find many more explanations related to technical analysis knowledge.
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Bollinger Bands are a technical analysis indicator consisting of three lines: an upper band, a middle band (which is a Moving Average), and a lower band. The upper and lower bands are calculated using standard deviations from the moving average. They help traders identify overbought and oversold conditions, as well as periods of high and low volatility.
The default setting for Bollinger Bands is (20, close, 2) — meaning a 20-period moving average using closing prices, with the bands set at 2 standard deviations above and below the moving average. This setting works well for most timeframes including daily and weekly charts.
There are two primary techniques: (1) Support and Resistance — using the upper band as resistance and the lower band as support to identify potential entry and exit points; (2) Bollinger Band Squeeze — when the bands narrow, it indicates low volatility and often precedes a significant price breakout in either direction.
Yes, Bollinger Bands work best when combined with other technical indicators such as RSI (Relative Strength Index), MACD, or volume analysis. Using multiple indicators together helps confirm signals and reduces the likelihood of false breakouts.