# Bollinger Bands 📊🔔
## What is it
Bollinger Bands are a technical indicator consisting of three lines around a simple moving average (SMA) that automatically expand and contract based on market volatility.
- Middle Band: simple moving average of price (usually over 20 periods)
- Upper Band: SMA + (K × standard deviation)
- Lower Band: SMA − (K × standard deviation)
Usually K = 2
## How to read signals
## Application in trading
1. Squeeze (Bollinger Squeeze)
A narrow range — a signal to accumulate a position before a strong move
2. Reversal Trading
Enter long upon touching the lower band and confirming with a signal
Enter short upon touching the upper band and confirming with indicators (e.g., RSI)
3. Trend Strategies
Price holds at the upper band — upward trend
Price at the lower band — downward trend
#Tips and nuances
- Do not trade solely on touching the bands — use confirmation
- In a trend, price can move along one of the bands
- Adjust the indicator parameters for the specific market (SMA: 10–30, K: 1.5–2.5)