Deep Dive
Everything You Need to Know
Under the Hood
How It Works
The default setting uses a 20-period SMA with bands set at 2 standard deviations. Bands widen during high volatility and contract during low volatility.
In Practice
How Traders Use It
Prices near the upper band may indicate overbought conditions; near the lower band may indicate oversold. The "squeeze" (narrow bands) often precedes significant price moves.
Highlights
BBANDS at a Glance
Middle band: 20-period SMA
Upper/lower bands: ±2 standard deviations
Band width reflects volatility
Squeeze signals potential breakout
Useful for mean-reversion strategies
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