Wrap price in a volatility envelope of standard-deviation bands around a moving average.
What are Bollinger Bands?
Bollinger Bands are a volatility envelope drawn around a moving average, invented by John Bollinger in the 1980s. The middle band is typically a 20-period simple moving average; the upper and lower bands sit two standard deviations above and below it. Because the bands widen when volatility rises and contract when it falls, they visually frame how far price has stretched from its recent mean at any moment.
Illustrative price with a 20-period midline and two-standard-deviation Bollinger Bands. Synthetic data for demonstration.
Bollinger Bands turn a flat moving average into a dynamic channel that breathes with volatility. When a market goes quiet the bands pinch together; when it gets excited they flare apart. This tool overlays a 20-period midline with two-standard-deviation envelopes so you can see squeeze and expansion phases at a glance.
The most watched Bollinger pattern is the squeeze: bands contracting to an unusually narrow width as realized volatility collapses. A squeeze does not say which way price will break, only that a low-volatility regime rarely persists. Traders treat the eventual expansion — bands snapping wider as a directional move begins — as confirmation that a new trend leg has started, then look elsewhere for the direction.
A tempting but dangerous reading is to fade every touch of the upper band as overbought and every touch of the lower band as oversold. In a powerful trend price will hug and 'walk' the outer band for extended stretches, so mechanical fading bleeds capital. Bollinger himself stressed that a band touch is not a signal in isolation; it is context that must be paired with momentum or volume before acting.
Quadesto builds the envelope directly from your uploaded price column. You choose the moving-average period and the standard-deviation multiplier, and the compute engine appends midline, upper and lower columns using a true rolling standard deviation over the same window — not an approximation. The result plots as the overlay above and embeds into any report, so the bands recompute automatically whenever your source data updates.
Upload a CSV or connect a live source, and Quadesto renders this exact chart — styled, computed, and embeddable in your reports and newsletters. Free to start.
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