Bollinger Bands (BOLL), created by John Bollinger, are a technical indicator designed to measure the volatility of an asset and identify potentially "high" or "low" areas on a chart.

1) Composition

- A simple moving average (SMA), usually with a period of 20.

- Two bands: one above the moving average (Upper Band) and one below it (Lower Band). These bands are often located two standard deviations from the SMA, which allows them to automatically adapt to market volatility.

2) Interpretation

- When the bands come together (Bollinger Band Squeeze), this suggests a decrease in volatility. A marked price movement can then occur as the bands start to spread apart again. - When the price touches or exceeds the upper band, the asset is sometimes considered to be in the "high zone" (be careful, however, in a strongly bullish market, prices can remain near this band for a long time).

- When the price approaches or falls below the lower band, it is called a "low zone" (same warning if the market is very bearish).

3) Practical use

- Bollinger Bands are often used in addition to other indicators (RSI, MACD, volumes, etc.) to confirm a potential reversal or identify the strength of a trend.

- Traders can also spot "break out" signals when the price clearly crosses one of the bands, which can mark the start of a more pronounced dynamic.

In summary, Bollinger Bands (BOLL) offer a dynamic visualization of volatility and make it possible to assess whether an asset is potentially in an overbought or oversold zone. However, it is best not to base your entire trading strategy solely on this indicator and to always compare your results with other technical or fundamental analyses.