Bollinger Band
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A Bollinger band [1] is an indicator that compares volatility and relative price levels over a specific period of time. Three bands are plotted: a simple moving average, an upper band of the simple moving average, plus two standard deviaitons and a lower band of the simple moving average, minus two standard devations. As markets become more volatile, the bands typically widen, or move farther from the average. As markets become less volatile, the bands typically contract, or move closer to the average.
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References
- ↑ Technical Analysis Terms. Lind-Waldock. Retrieved on April 25, 2008.
