Bollinger Bands Stock Index Indicator & Indices Price Volatility
When stock index price volatility is high; stock index prices close far away from the moving average, the stock indices Bollinger Bands width increases to accommodate more possible stock index price action movement which can fall within 95% of the mean.
Bollinger bands stock indices indicator will widen as stock index price volatility widens. This will show as bollinger band bulges around the stock index price. When the stock indices bollinger bands widen like this it is a continuation stock indices pattern and stock index price will continue moving in this direction. This is normally a continuation stock index trading signal.
The Bollinger bands stock indices indicator example illustrated below illustrates the Bollinger bulge.
High Indices Price Volatility - Stock Index Trading Bollinger Bands Indicator - Bollinger Bands Bulge
When stock index price volatility is low: stock index prices close closer toward the moving average, the width decreases to reduce the possible stock index price action movement which can fall within 95% of the mean.
When stock index price volatility is low stock index price will start to consolidate waiting for stock index price to breakout. When the stock indices bollinger bands indicator is moving sideways it is best to stay on the sidelines and not to place any stock index trades.
The Bollinger bands indicator examples is illustrated below when the stock indices bollinger bands narrowed.
Low Indices Price Volatility - Stock Index Trading Bollinger Bands Indicator - Bollinger Bands Squeeze
