WickCheck / Trading school / Bollinger bands
Bollinger bandsBeginner
A moving average with bands two standard deviations above and below it.
What it means
Bands widen when volatility rises and squeeze when it falls. Closes outside the lower band are a common mean-reversion entry on indices.
How to spot it
- 20-period average with 2-deviation bands.
Common mistakes
- Treating a band touch as an automatic reversal.
Related terms
Moving averageThe average closing price over the last N candles, drawn as a line.…ATRThe average size of recent candles, including gaps. A volatility measure.…RangeSideways price between a clear high and low, with no trend.…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.