Bands around a moving average showing how wide price swings are
Bollinger Bands draw a channel above and below a moving average using standard deviation. When price swings are violent the bands widen; when things settle they narrow. Statistically most prices fall inside the two-deviation band, but that is not a promise that price will not move outside it.
With a $1,000 average and a $20 standard deviation, the two-deviation band runs from $960 to $1,040.
For learning, not investment advice. Decisions are your own.
StockFit · TrueNorthLabs Inc.