An indicator that uses three lines, a moving average in the middle and a band above and below it, to show how much the price is swinging compared with usual.
- Weapon tier
- Elite
- Slots used
- On chart 3/6
- Created by
- John Bollinger · 1980s
Concept
The middle line (Middle) is the simple moving average of the last 20 closes, and the Upper band and the Lower band are drawn above and below it. The gap between the two bands widens and narrows on its own, depending on how jagged the price has been recently.
When the price is quiet the bands narrow, and when it swings hard they widen. The bands do not tell you whether the price will rise or fall. They are a tool for seeing how much it is shaking.
- Middle
- Upper
- Lower
Charts by TradingView Lightweight Charts™
80 candles with the three Bollinger Band lines and volume. The bands are narrowest from candle 62 to candle 65 (shaded), and after candle 66 (yellow vertical line) closes outside the Upper band, the bands widen. The price then rises a little and gets pushed back. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
The shading is where the bands were narrowest, and the candle marked with a yellow vertical line is the one that closed outside the band. Watch how the price rises a little and is then pushed back. Leaving the band does not mean the price keeps rising. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
Middle = the simple average of the last 20 closes. It is the same line as the moving average in lesson 3.
Find the standard deviation: a value that shows how widely the last 20 closes were scattered around that average. The more scattered they are, the larger it gets.
Upper band = Middle + standard deviation × 2, and Lower band = Middle − standard deviation × 2.
With the defaults, people often say “most closes stay inside the bands”, but that is not a rule the price has to follow. The price leaves the bands more often than you might think.
Parameters
| What it sets | Name in the game | Default | Range |
|---|---|---|---|
| Candles used for the average and standard deviation | period | 20 | 2 – 200 |
| Band width (multiple of the standard deviation) | stdDevMultiplier | 2 | 0.5 – 5 |
Trading ideas
Squeeze: when the bands stay unusually narrow for a while and then a candle closes outside them, it is commonly read as a sign that a quiet price has started to move. The first chart on this page shows that scene. The bands do not tell you the direction, though, so look at which side the price broke out on, together with the trend (lesson 2).
Sideways: when the price moves sideways with no clear trend, some traders sell near the Upper band and buy near the Lower band, betting on a pullback. Once a trend appears, this approach goes wrong right away.
Common traps
- In a strong trend the price clings to a band and “rides” it. If you sell (or buy) just because the price touched the band, you miss most of the move. The next chart shows that scene.
- The bands do not tell you the direction. It is common for the price to break out one way after a squeeze and then reverse right away.
- None of these are sure signals. Read them together with the trend and volume.
- Middle
- Upper
- Lower
Charts by TradingView Lightweight Charts™
80 candles with the three Bollinger Band lines and volume. From candle 20 to candle 44 (shaded), the closes stay close to the Upper band and keep rising. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
If you had sold in the shaded stretch because “it touched the band”, you would have missed most of the rise.
In the game
- “Bollinger Bands” is an “Elite” weapon and uses 3 “On chart” lines (limit 6).
- Together with the two Simple Moving Average lines in the starting setup (2 lines), it uses 5 lines, leaving 1 free.
- With the same period, the Middle line is the same line as Simple Moving Average. The space between the bands is not filled; only the three lines are drawn.
Related indicators and lessons
- ATR — An indicator that shows, in price units, how much a single candle usually moves. It does not say which way; it only measures the size of the swings.
- Envelope — An indicator that draws lines a “fixed percentage” above and below a moving average, to show how far the price has moved away from the average.
- Keltner Channels — An indicator that puts an exponential moving average in the middle and draws two lines above and below it, set apart by the usual daily range (ATR), to show the price’s “normal range”.
- Donchian Channel — An indicator that traces the highest and lowest prices of a recent period, showing the moment the price leaves its “range so far”.
- Standard Deviation — An indicator that shows, as a single number, how widely recent closes are scattered around their average. The larger it is, the harder the price is swinging.
- Chaikin Volatility — A volatility indicator that shows, as a % change, how much the gap between each candle’s high and low has been widening (or narrowing) lately.
- 3. Moving averages
- 2. Trends and sideways moves