Bollinger Bands Indicator Bulge and Squeeze Technical Analysis

The Stock Indices Bollinger Bands are self adjusting which means the bands widen and narrow depending on Stock Indices price volatility.

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

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

The Bollinger Bands Squeeze - How to Stock Indices Trade Bollinger Bands Squeeze

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

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

Bollinger Squeeze - The Bollinger Bands Squeeze - How to Stock Indices Trade Bollinger Bands Squeeze

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

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

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

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