01 — SQUEEZE
Quiet is getting tighter.
When the bands narrow, realized volatility is low. That often precedes a larger move—but the squeeze does not tell you its direction.
Technical analysis / field note 01
Bollinger Bands, without the mystique.
You already understand price. This is the practical bridge into technical analysis: a simple way to see volatility, context, and when a market is behaving unusually.
Start with the signal ↓DEMO / DAILY CLOSE$184.62 +1.8%
bands20-day averageclose
01 / The basics
One line for price. Two lines for its recent range.
Bollinger Bands are a volatility indicator created by John Bollinger. They wrap a moving average with boundaries that expand when price swings get larger and contract when price gets quieter.
Middle band = 20-period simple moving average
Upper band = middle band + (2 × standard deviation)
Lower band = middle band − (2 × standard deviation)
Upper band = middle band + (2 × standard deviation)
Lower band = middle band − (2 × standard deviation)
The default settings—20 periods and two standard deviations—are a starting point, not a law. The useful question is not “did price touch a line?” but “what does that touch mean in this market and timeframe?”
Think in context. A band is a moving reference point. It is not resistance, support, or a standalone buy/sell trigger.
02 / How to read it
Read the shape before the signal.
The bands become useful when you treat volatility as information. Start with the band’s posture, then look at how price behaves inside it.
02 — EXPANSION
Movement has arrived.
After a squeeze, bands widen as volatility returns. A sustained move can “walk” one band rather than immediately reverse.
03 — LOCATION
Where is price living?
Price hugging the upper band during a strong trend can show strength. The same touch in a range may be closer to an overextension.
03 / The limits
Useful lens. Terrible oracle.
Bollinger Bands describe what price has recently been doing. They do not predict what must happen next.
Helpful question
Is volatility changing?
Compare current band width with its own history. A narrow band relative to recent behavior carries more information than a narrow band in isolation.
Common trap
“Touch means sell.”
In a strong trend, price can ride the upper or lower band for longer than a fade trade can stay solvent.
Pair the indicator with market structure, position sizing, and a clear invalidation point. Technical analysis works best as a framework for organizing evidence—not as permission to skip risk management.