A moving average wrapped in a standard-deviation envelope. Squeeze, band-walk, the real meaning of ±2σ — and the worst misuse: 'fade the touch'.
Bollinger Bands, devised by John Bollinger in the 1980s, draw a band around a moving average using "standard deviation" (σ, sigma).
The centre line is a simple moving average (20 periods by default). Above and below it sit lines at ±1σ, ±2σ, ±3σ. When volatility is high the bands widen; when the market is quiet they narrow. The essence: it visualises not price itself but how violently price is moving.
Bollinger Bands are notorious for being especially misused. Despite John Bollinger himself repeatedly warning that "a touch of the band is not a buy/sell signal", many products teach the simple fade: "sell when price touches +2σ, buy when it touches −2σ". This article covers that misuse too.
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