Bollinger Bands Indicator Bulge and Squeeze Analysis

The Bollinger Bands are self adjusting which means the bands widen and narrow depending on xauusd trading price volatility.

Standard Deviation is the statistical measure of the price volatility used to calculate the widening or narrowing of the trading Bollinger bands. Standard deviation will be higher when prices are changing significantly and lower when the market trading prices are calmer.

• When price volatility is high the Bollinger Bands widen.
• When xauusd trading price volatility is low the Bollinger Bands narrows.

How Do I Trade Bollinger Bands Squeeze

Narrowing of trading Bollinger Bands is a sign of trading price consolidation & is known as Bollinger band squeeze.

When the Bollinger Bands indicator display narrow standard deviation it's usually a time of trading price consolidation, and it is a signal that there will be a trading price breakout and it shows traders are adjusting their trade positions for a new move. Also, the longer the prices stay within the narrow bands the greater the chance of a price break out.

Bollinger Squeeze - The Bollinger Bands Squeeze - How to Trade Bollinger Bands Squeeze

How Do I Trade Bollinger Bands Bulge

The widening of Bollinger Bands is a sign of a price break out & is known as Bollinger Band Bulge.

Bollinger Bands that are far apart can serve as a signal that a trend reversal is approaching. In the Bollinger bands indicator example shown and described below, the trading Bollinger bands get very wide as a result of high xauusd trading price volatility on the down swing. The trend reverses as trading prices reach an extreme level according to statistics and the theory of normal distribution. The "bulge" predicts the change to a downward trend.

Bollinger Bulge - The Bollinger Bulge - How to Trade Bollinger Band Bulge