A centerline with two price channels (or “bands”) above and below it. The centerline acts as an exponential moving average, while the bands are the standard deviation of the stock in question. The bands will expand or contract as the price action becomes volatile (expansion) or moves into a tight trading pattern (contraction).
Bollinger Bands
Market Terms
We don't know everything about the markets. We're just devoted to learning. Taken from those smarter than ourselves, here's how we define Bollinger Bands.