Bollinger Bands Stock Indices Indicator and Indices Price Volatility

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

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

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

High Indices Price Volatility - Indices Bollinger Bands Indices Technical Indicator - Bollinger Bands Bulge

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

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

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

Low Indices Price Volatility - Indices Bollinger Bands Indices Technical Indicator - Bollinger Bands Squeeze