Bollinger Bands

A 20-period SMA plus/minus 2 standard deviations. Bands widen with volatility, contract in quiet markets.

Formula

Middle = SMA(20)
Upper = Middle + 2·σ(20)
Lower = Middle − 2·σ(20)

What it's for

Mean-reversion (bounce off outer bands in a range), volatility squeeze breakouts (band-width collapse then expansion), trend-riding (walking the band in strong moves).

When it fails

Confusing "walking the band" (continuation) with "touched the band" (reversal). Bands widen AFTER a big move — reactive, not predictive.

On the chart

Nifty 50 daily bars with Bollinger Bands pre-loaded:

Where it's used on this site

3 strategies use Bollinger Bands:

🌊 Swing

Trading the Bollinger Bands

Mean reversion

🌊 Swing

Breakouts with BB width

Volatility expansion

🎯 Scalping

RSI Divergence + Bollinger Bands

Divergence

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