Bollinger Bands Indicator Bulge and Squeeze Analysis

The Trading Bollinger Band are self adjusting which means the bands widen and narrow depending on crude trading price volatility.

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

• When crude oil price volatility is high the Bollinger Bands widen.
• When crude oil price volatility is low the Bollinger Bands narrows.

How to Trade Bollinger Bands Squeeze

Narrowing of oil Bollinger Bands is a sign of crude oil price consolidation and is known as the Bollinger band squeeze.

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

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

How to Trade Bollinger Bands Bulge

The widening of Bollinger Bands is a sign of a price breakout and is known as the Bollinger Band Bulge.

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

Bollinger Bulge - The Bollinger Bulge - How to Trade Bollinger Bands Bulge