Bollinger Bands (BB)

Bollinger Bands (BB) are a technical analysis indicator created by John Bollinger that consists of a 20-period simple moving average as the middle band, with upper and lower bands plotted at two standard deviations above and below. When price approaches or penetrates the upper band, the asset may be overbought; when it touches the lower band, it may be oversold. The width of the bands adjusts dynamically to reflect current volatility conditions, making them useful for identifying potential breakouts and trend reversals.