Glossary Detail: Bollinger Bands & Squeeze
Related Premium Insight
Backtesting Bollinger Bands & Squeeze on High-Beta Names
Volatility bands plotted 2 standard deviations above/below a moving average. A squeeze (narrow bands) often precedes explosive moves.
Further Details:
Bollinger Bands consist of a middle band (20 SMA) and upper/lower bands set at 2 standard deviations above and below. The bands expand when volatility increases and contract when it decreases. A 'Bollinger Squeeze' occurs when the bands narrow to their tightest point — this compression often precedes a sharp breakout.