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Bollinger Bands Definition

Bollinger Bands are a technical indicator made up of a moving average and two bands set above and below it based on price volatility.

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What are Bollinger Bands?

The bands widen when volatility increases and contract when volatility falls, helping traders visualize relative price extremes.

Price touching or moving outside a band is sometimes used as a signal to assess potential overbought or oversold conditions.

Example of Bollinger Bands

A price move that pushes above the upper Bollinger Band may be viewed by traders as a stretched, higher-volatility condition.

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