Bollinger Bands Oil Indicator Bulge and Squeeze Technical Analysis

The Oil Trading Bollinger Band are self adjusting which means the bands widen and narrow depending on crude oil price volatility.

Standard Deviation is the statistical measure of the crude oil price volatility used to calculate the widening or narrowing of the oil trading Bollinger bands. Standard deviation will be higher when oil prices are changing significantly and lower when the crude oil market oil prices are calmer.

• When crude oil price volatility is high the Bollinger Bands widen.
• When crude oil price volatility is low the Bollinger Bands narrows.

The Bollinger Bands Squeeze

Narrowing of oil trading Bollinger Bands is a sign of crude oil price consolidation and is known as the Bollinger band squeeze.

When the Bollinger Bands indicator display narrow standard deviation it is usually a time of crude oil price consolidation, and it is a oil signal that there will be a oil price breakout and it shows oil traders are adjusting their trade positions for a new move. Also, the longer the oil prices stay within the narrow bands the greater the chance of a oil price breakout.

Bollinger Squeeze - The Bollinger Bands Oil Trading Squeeze - How to Oil Trade Bollinger Bands Squeeze

The Bollinger Bulge

The widening of Bollinger Bands is a sign of a oil price breakout and is known as the Bollinger Bands Bulge.

Bollinger Bands that are far apart can serve as a oil signal that a oil trend reversal is approaching. In the Bollinger bands oil indicator example explained below, the oil trading Bollinger bands get very wide as a result of high crude oil price volatility on the down swing. The oil trend reverses as oil prices reach an extreme level according to statistics and the theory of normal distribution. The "bulge" predicts the change to a downward oil trend.

Bollinger Bulge - Oil Trading The Bollinger Bulge - How to Oil Trade Bollinger Bands Bulge