Bollinger Bands Trading Indicator Bulge & Squeeze Technical Analysis

The Indices Bollinger Bands are self adjusting which means the bands widen & narrow depending on Indices price volatility.

Standard Deviation is the statistical measure of the Indices price volatility used to calculate the widening or narrowing of the Indices Bollinger bands. Standard deviation will be higher when Indices prices are changing significantly & lower when the Indices market prices are calmer.

• When Indices price volatility is high the Bollinger Bands widen.
• When Indices price volatility is low the Bollinger Bands narrows.

The Bollinger Bands Squeeze - How to Stock Indices Trade Bollinger Bands Squeeze

Narrowing of Stock Indices Bollinger Bands is a sign of Stock Indices price consolidation & is known as the Bollinger band squeeze.

When the Bollinger Bands Stock Index indicator display narrow standard deviation it is usually a time of Stock Indices price consolidation, & it is a Indices trading signal that there will be a Indices price breakout and it shows Stock Index traders are adjusting their trade positions for a new move. Also, longer the Indices prices stay within the narrow bands the greater the chance of a Indices price breakout.

Bollinger Squeeze - How to Stock Indices Trade Bollinger Bands Squeeze

The Bollinger Bulge - How to Stock Indices Trade Bollinger Bands Bulge

The widening of Bollinger Bands is a sign of a Indices price breakout and is known as the Bollinger Bands Bulge.

Bollinger Bands that are far apart can serve as a Indices trading signal that a Indices trend reversal is approaching. In the Bollinger bands Stock Index indicator example below, Indices Bollinger bands get very wide as a result of high Stock Indices price volatility on the down swing. The Indices trend reverses as prices reach an extreme level according to statistics & the theory of normal distribution. The "bulge" predicts the change to a Indices downtrend.

Bollinger Bulge - How to Stock Indices Trade Bollinger Bands Bulge