Bollinger Bands Stocks Indicator Bulge and Squeeze Technical Analysis

The Stocks Trading Bollinger Bands are self adjusting which means the bands widen and narrow depending on stocks price volatility.

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

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

The Bollinger Bands Squeeze

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

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

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

The Bollinger Bulge

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

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

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