Lower band – SMA (minus two standard deviations). The Bollinger Bands® consist of three bands, which revolve around a centred simple moving average (SMA), with the default value of 20, of which 85% of the time, the price is held within the following default boundaries: Possible market tops or bottoms, and potential price targets. Periods of upcoming large volatility breakouts. Bollinger Bands® measure market volatility and provide lots of useful information, including: These lines, also known as envelopes or bands, widen or contract according to how volatile or non-volatile a market is. This is a specific utilisation of a broader concept known as a volatility channel.Ī volatility channel plots lines above and below a central measure of price. 
Bollinger bands use a statistical measure known as the standard deviation, to establish where a band of likely support or resistance levels might lie. John Bollinger, creator of the Bollinger Bands® defines them as ''a technical analysis tool, they are a type of trading band or envelope''. We will then provide three trading strategies that utilise Bollinger bands, before explaining a few more advanced Forex trading strategies for you to consider! We will explain what they are and how to use and interpret them. In this article, we will provide a comprehensive guide on how to trade with Bollinger Bands in Forex trading.
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