Indicators · 6 min read

Bollinger Bands explained: volatility, range and expansion

Use Bollinger Bands to describe volatility contraction and expansion while avoiding the mistake of treating every band touch as a reversal.

Bands describe volatility around an average

Bollinger Bands combine a moving average with upper and lower bands based on standard deviation. The band width changes as recent price variability changes.

A touch of the upper or lower band is not automatically a reversal. In a strong trend, price can walk along a band while volatility remains elevated.

Read the band regime first

Look for whether the bands are contracting, expanding or drifting sideways. Then compare the regime with price structure, volume and the timeframe before selecting a continuation or mean-reversion hypothesis.

Save the indicator settings in a layout so you can compare the same process across Indian indices and stocks without repeatedly rebuilding the chart.

Related guides and tools

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Try the workflow on charting

Open a live Indian-market chart, add the indicator, and save the layout you want to revisit.