Bollinger Bands are a technical indicator that helps to determine market volatility, overbought and oversold zones, as well as potential price reversal points. It consists of three lines:

📈 The middle line is the moving average (usually SMA 20). It reflects the average price over a certain period of time.

📉 The upper and lower bands are calculated based on the standard deviation from the middle line and show the range of volatility.

🤓 How to use Bollinger Bands:
▪️ Price touches the upper band — the market may be overbought (a downward correction is possible).
▪️ Price touches the lower band — the market may be oversold (an upward move is possible).
▪️ Band squeeze — low volatility, a strong breakout to one side is possible.
▪️ Band expansion — high volatility, the trend is already developing.

🧐 Application strategies:
🔹 Squeeze — when the bands narrow to a minimum — a signal of a possible impulse move.
🔹 Rebound from the boundaries — price bounces from the upper/lower band to the middle. Suitable for a ranging market.
🔹 Band breakout — price moves beyond the boundaries, especially on news — can signal a continuation of movement but requires confirmation.

🛍 Probability of success:
▪️ Works great in range and during increased volatility — probability of signal success ~65–75%.
▪️ In trending movements, it may lag or give false reversals.

✔️ Recommendations:
🔸 Effectively combines with RSI, MACD, support/resistance levels, and candlestick patterns.
🔸 Do not open trades solely based on touching the bands — the market context is important.

📌 Remember: Bollinger Bands are not a signal in themselves, but a contextual tool that shows what the price is doing in relation to volatility.

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