Bollinger Bands

What are Bollinger Bands ? “Bollinger Bands” is a technical indicator developed by Jhon Bollinger in the early 1980s. Technical Analysts use Bollinger Bands to identify overbought and oversold conditions in the market. This indicator consists of 3 bands. The middle band, which is a simple moving average of 20 days and an upper and lower band. the upper and lower bands are based on the standard deviation of prices and the volatility. When volatility in the price of an asset increases the bands automatically widen and when volatility decreases, they contract. The upper and lower bands are generally 2 standard deviations plotted positively and negatively away from a 20-day simple moving average but can be modified. These Bands also act as possible Support and Resistance areas.
26/03/2022