Bollinger Bands Stock Indicator and Stocks Price Volatility

When stocks price volatility is high; stocks prices close far away from the moving average, the stocks Bollinger Bands width increases to accommodate more possible stocks price action movement that can fall within 95% of the mean.

Bollinger bands stocks indicator will widen as stocks price volatility widens. This will show as bollinger band bulges around the stocks price. When the stocks bollinger bands widen like this it is a continuation stocks pattern and stocks price will continue moving in this direction. This is normally a continuation stocks signal.

The Bollinger bands stocks indicator example illustrated and explained below illustrates the Bollinger bulge.

High Stocks Price Volatility - Stock Trading Bollinger Bands Indicator - Bollinger Bands Bulge

When stocks price volatility is low; stocks prices close closer towards the moving average, the width decreases to reduce the possible stocks price action movement that can fall within 95% of the mean.

When stocks price volatility is low stocks price will start to consolidate waiting for stocks price to breakout. When the stocks bollinger bands indicator is moving sideways it is best to stay on the sidelines and not to place any stock trades.

The Bollinger bands indicator example is shown below when the stocks bollinger bands narrowed.

Low Stocks Price Volatility - Stock Trading Bollinger Bands Indicator - Bollinger Bands Squeeze