Bollinger Bands
From Reuters Financial Glossary
Used in technical analysis. Bollinger bands are lines plotted one standard deviation above and below the moving average of the closing prices. A standard deviation measures price volatility so these bands narrow and widen in line with volatility â?? narrow in calm markets and wide in volatile markets. The narrowing of the bands often indicates the start of a new trend, which is confirmed when prices break and close out of the band. Bollinger bands may be used with any price chart but are most commonly used with bar charts.
See also: Bar Chart, Technical Analysis, Standard Deviation
