What it measures
Bollinger Bands draw a 20-period simple moving average with an upper and lower band two standard deviations away. Bands widen when volatility rises and narrow when it falls. About 95% of closes fall inside the bands only if prices were normally distributed, which they are not, so treat touches as context rather than signals.
Practise without risk $50,000 in virtual funds. No deposit. Try a $50,000 demo account Affiliate link. High risk of losing money.
Starting settings by expiry
| Expiry | Settings | Signal |
|---|---|---|
| 1 min | 20, 2 on 15-sec candles | Rejection at outer band |
| 5 min | 20, 2 on 1-min candles | Band touch + RSI extreme |
| 15 min | 20, 2 on 5-min candles | Squeeze, then breakout close |
Starting points for testing on a demo account, not proven profitable settings.
How traders use it
- Range trading: in a flat market, a rejection candle at the outer band suggests a return towards the middle line.
- Squeeze breakout: very narrow bands often come before a strong move; trade the direction of the first close outside the bands.
- Trend riding: in a strong trend price “walks the band” — do not fade it.
Where it fails
- A band touch is not a reversal signal by itself.
- Squeezes can break either way; wait for the close.
Works well with
- RSI (Relative Strength Index) — Momentum oscillator from 0 to 100.
- Stochastic oscillator — Where the close sits in the recent range.
FAQ
What do Bollinger Bands show?
They show volatility: how far price usually moves around its 20-period average.
ExpiryLab Editorial Research desk We open broker accounts from our target countries, test deposits and withdrawals, and log what we measure.
How this page was made: drafted with AI assistance from public sources and our own test logs, then checked and edited by the ExpiryLab editorial team. The date above shows the last check. How we test · Editorial policy