Bollinger Band

What is Bollinger Band?

A Bollinger Band is a technical analysis tool that consists of a moving average and two standard deviation lines that are plotted two standard deviations away from the moving average. It is used to identify the volatility and potential trends of a security or an asset. The Bollinger Bands are created by plotting a moving average, usually a 20-day simple moving average, and two standard deviation lines above and below the moving average. The standard deviation lines are plotted two standard deviations away from the moving average, which means that they are calculated based on the volatility of the security or asset.