A Bollinger Band is a technical analysis tool defined by a set of lines, plotted x standard deviations (positively and negatively) away from a simple moving average (SMA) of the security's price (can be adjusted to user preferences). Bollinger Bands were developed and copyrighted by famous technical trader John Bollinger.
Bollinger Bands are a highly popular technique. Many traders believe the closer the prices move to the upper band, the more overbought the market, and the closer the prices move to the lower band, the more oversold the marke
The strategy produces a buy signal if the closing price of a candle is smaller than the lower Bollinger Band. A sell signal is produced if the closing price is larger than the upper Bollinger Band.