Bollinger Bands
Frames an average with bands based on recent standard deviation.
Start with the input, not the story.
Price dispersion around a moving average.
The simulator's exact 20-period, two-standard-deviation Bollinger calculation runs after a hidden warm-up. Read the sequence in stages: the bands narrow, price completes a close outside them, and a later candle returns inside.
Selling every upper touch or buying every lower touch can be costly in a trend. Compare results with and without a trend filter.How traders commonly use Bollinger Bands
Traders research band-width compression and completed closes during expansion, or study range re-entry when an independent range definition exists.
Frame a moving average with rolling standard-deviation bands to show relative dispersion.
Keep this job separate from entry timing, stop placement and position size.
A useful counterexample
Price can walk an outer band in a strong trend, so an outer-band touch is not automatically a reversal observation.
Bands for compression, structure for direction, ATR for movement scale
Each part has a different job. If two tools answer the same question, remove one and compare the result.
Identify relative compression or expansion.
Defines the level and direction that must be resolved.
Confirms whether realised range is expanding.
Follow the same order every time
- Freeze the band period, deviation multiple and applied price.
- Define compression using a numeric bandwidth rule on completed candles.
- Mark the nearest structural boundary before any expansion occurs.
- Record touch, completed close outside and pullback as separate observations.
- Compare the squeeze rule with and without the ATR expansion condition.
The indicator is one part of the method
These strategy pages show the market conditions, entry, stop and exit around the indicator.
Bollinger squeeze
Tests whether unusually narrow bands precede a tradable volatility expansion.
- ENTRY
- Enter at the next H1 open in the direction of the first eligible release close.
- STOP
- Place stop at the opposite side of the frozen six-bar range. Risk 0.50% equity, rounded down to 0.01 lot.
- EXIT
- Take profit at 2R. Exit at market after 16 completed H1 bars if unresolved.
Range mean reversion
Tests whether qualified boundary excursions revert toward a range midpoint.
- ENTRY
- Enter at the next H1 open after the first qualifying close back inside the frozen range.
- STOP
- Place the stop 0.20 × ATR(14) beyond the excursion extreme and size to 0.50% equity risk, rounded down to 0.01 lot.
- EXIT
- Exit at the frozen range midpoint. If neither stop nor midpoint trades, exit after eight completed H1 bars.
Volatility-targeted momentum
Scales a simple momentum signal so higher-volatility pairs do not dominate risk.
- ENTRY
- At Monday 00:00 UTC, rebalance selected pairs to inverse-60-day-volatility weights, normalised to 10% ex-ante portfolio volatility and then reduced proportionally to satisfy every cap.
- STOP
- No chart stop. Cut a pair to zero at the next daily open if its one-day loss exceeds 3 × its 60-day daily volatility; suspend all new entries for one week if estimated portfolio volatility exceeds 15%.
- EXIT
- At each weekly rebalance, exit a pair that leaves its top/bottom-two rank, loses the 2% absolute-score threshold or breaches a risk rule; otherwise resize to the new capped target weight.
Set up Bollinger Bands on your platform
Match the lesson's period, price input, smoothing and candle timing. Similar names can still produce different values across feeds and platforms.
MT4
Built inAvailable in the standard MT4 indicator library. Names and default settings can differ.
MT4 technical analysisWickAtlas MT4 setup guideMT5
Built inAvailable in the standard MT5 indicator library. Names and default settings can differ.
MT4 and MT5 comparisonWickAtlas MT5 setup guideTradingView
Built inAvailable in the standard TradingView indicator library. Names and default settings can differ.
TradingView indicatorsWickAtlas TradingView guide“Built in” means the standard platform library contains the underlying indicator. It does not mean its defaults or calculation match every third-party version. Compare the platforms.
Plain-language formula
The same indicator can look slightly different across platforms because the price input, smoothing and rounding may change. Note your settings before comparing two charts.
Where it may help
Volatility compression, expansion and range research.
Where it struggles
Strong trends, where price can walk a band rather than reverse.
What to pair it with
Pair it with something that answers a different question, such as volatility or market direction. Try the indicator on its own before adding more tools.
The shortcut to avoid
Fading every outer-band touch.
Try this on a chart
Define squeeze, close and re-entry rules precisely; compare trend-filtered and unfiltered samples.