Trading glossaryReviewed 16 July 2026
Definition
Bollinger Bands are a technical overlay that places volatility-based upper and lower bands around a moving average of an instrument’s price.
In market context
The bands usually expand when recent price dispersion rises and contract when it falls, with parameters chosen by the analyst. Touching a band is not independently a buy or sell signal because strong trends can keep price near one side for extended periods. Results vary with timeframe, lookback, and market, so the overlay should be interpreted with price context and risk controls.
Risk context
Band settings are backward-looking and cannot determine whether an apparent extreme will reverse or continue.
Source
Use the primary source for fuller regulatory or market context.