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Bollinger Bands
IndicatorsA volatility indicator consisting of a 20-period SMA with upper and lower bands at 2 standard deviations. A squeeze (narrow bands) signals low volatility before potential breakout; walking the bands indicates strong trend.
Related Terms
Volatility
The degree of variation in a security's price over time.
SMA (Simple Moving Average)
A moving average calculated by adding closing prices over a period and dividing by the number of periods.
Mean Reversion
A trading philosophy based on the idea that prices tend to return to their average over time.