A shrinking range comes before expansion · a tight range warns of a coming move.
The short answer
- What are Bollinger Bands (Bollinger Bands)?
- Bollinger Bands: an average ± two standard deviations.
- When do Bollinger Bands get it wrong?
- A band touch is not a buy or sell signal · in a trend it gets touched again and again. Its current reading on platform symbols, at the last daily close, is in the "Reading now" table on this page. Reading now →
Reading now
| Ticker | Value | Five sessions ago | Status |
|---|---|---|---|
| SPY | 79.7% | — | Price is inside the bands · width is 3.6% of the average |
| QQQ | 54.2% | — | Price is inside the bands · width is 7.1% of the average |
| IWM | 12.9% | — | Price is inside the bands · width is 4.3% of the average |
| DIA | 65.1% | — | Price is inside the bands · width is 2.4% of the average |
A description of where the number sits against its thresholds. It is not an entry or exit signal.
Indicator limit
A band touch is not a buy or sell signal · in a trend it gets touched again and again.
Read it with
Moving average convergence divergence: a squeeze doesn't say which way, but MACD does when price leaves the bands.
Answers: Has the move stretched? Where should the stop go?
What it actually does
Bollinger Bands are three lines: a moving average in the middle, and two bands above and below it at two standard deviations of the same volatility. So the distance between the bands is not fixed. It breathes with volatility, widening in turbulence and narrowing in calm.
How to read them in practice
A common mistake is reading a band touch as a reversal signal. More accurately, the bands describe the state of volatility: a very tight squeeze means compressed calm that often precedes a big move, with no known direction. Wide bands mean the move is under way.
Walking the band
In a strong trend, price hugs the upper band for several sessions in a row. This is strength, not overbought. Whoever sold at the first touch exited at the start of the wave. A reversal becomes more likely when price fails to reach the band after having walked along it.
Hypothetical example
A stock's bands narrow to their tightest range in six months: a clear squeeze. The trader isn't betting on a direction but preparing for a move either way, with structures that profit from the move itself or by waiting for the breakout and confirming it with volume.
Where it goes wrong and why
They carry no direction on their own, and widening doesn't remove the question "which way?". Relying on a band touch alone in a strong trend is a steady loss.
What to read it with
Read them with Average True Range, since both measure volatility from a different angle. Read them with Implied Volatility Rank, which tells you whether the options market prices in a coming move that confirms the squeeze. And read them with volume at the breakout. A squeeze with cheap Implied Volatility is a textbook setup for buying a move, and with expensive Implied Volatility it is the reverse.
Where to see it on the platform
The technical chart draws them on any symbol, and the volatility tools add the complementary reading from the options market, not from price alone.
