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Trading

Bollinger Bands

A technical indicator consisting of three lines: a middle moving average and two outer bands that represent standard deviations above and below it. When the price touches the upper band, the asset may be overbought. When it touches the lower band, it may be oversold. Bands widen during volatile periods and narrow during calm ones.

Example

The price squeezed between tight Bollinger Bands for a week before a major breakout.

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