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Bollinger Bands, bandwidth and volatility squeezes
ਅੱਪਡੇਟ 4 ਅਗਸਤ 2026 · 3 ਮਿੰਟ ਪੜ੍ਹਨ ਦਾ ਸਮਾਂ · 14 ਵਿਸ਼ਾ-ਸੂਚੀ
ਸਰਲ ਭਾਸ਼ਾ ਵਿੱਚ ਅਰਥ
Bollinger Bands place configurable standard-deviation bands around a moving average. %B expresses close within or beyond the bands, bandwidth expresses band width relative to the middle line, and a squeeze compares compression under an explicit rule.
Learning objectives #
You should be able to calculate standard bands, interpret %B and bandwidth, distinguish volatility magnitude from direction, and explain why touching a band can occur during both continuation and reversal.
Core concept #
XMarketRadar's standard setting uses a 20-close SMA and trailing population standard deviation with divisor N. Upper=SMA+2×deviation and lower=SMA−2×deviation. %B=(close−lower)/(upper−lower). Bandwidth=(upper−lower)/middle×100. Zero width or invalid denominator is unavailable.
Method and conventions #
Record input, period, deviation multiplier and population-versus-sample convention. Compare compression with the same instrument's prior bandwidth rather than an arbitrary cross-market number. A squeeze release needs a defined transition, not merely narrow-looking bands.
Use it in XMarketRadar #
Add bands in charting, verify parameters and inspect width through time. Use %B and bandwidth in Screener only when the full window exists. For XMarketRadar's volatility-squeeze label, read the documented Bollinger-versus-Keltner rule.
Worked example #
With middle 100 and population deviation 4 at multiplier 2, bands are 108 and 92. A close of 106 has %B=(106−92)/16=0.875 and bandwidth 16%. It is high within the window but not evidence of an inevitable fall.
How to interpret it #
%B equals 0 at lower, 0.5 at middle and 1 at upper; values may extend beyond that range. Wider bands mean greater recent dispersion. Bandwidth has no bullish or bearish sign, and release direction is a separate observation.
Limitations and common mistakes #
Do not call an upper-band touch overbought without a defined method, compare different multipliers, use sample deviation against population-based references or fit squeeze thresholds on the same evaluation sample.
Market-specific differences #
Volatility regimes and price limits differ by venue. Percentage bandwidth supports scale comparison better than raw width, but liquidity, session structure and interval still prevent universal thresholds.
Key takeaway #
Key takeaway: bands measure relative location and recent dispersion. Neither band carries an inherent directional instruction.
Practice exercise #
Practice: calculate bands, %B and bandwidth for a supplied window, then describe two distinct scenarios that could both produce %B above 1.
Educational use only #
This chapter is descriptive education. It is not investment advice, a price prediction, a recommendation, a claim of predictive accuracy, or an instruction to buy, sell, rebalance or place an order.