What is Bollinger Bands?
Bollinger Bands, a popular tool among investors and traders, helps gauge the volatility of stocks and other securities to determine if they are over- or undervalued. Developed in the 1980s by financial analyst John Bollinger, the bands appear on stock charts as three lines that move with the price. The center line is the stock price's 20-day simple moving average (SMA). The upper and lower bands are set at a certain number of standard deviations, usually two, above and below the middle line.
