Bollinger Bands

Bollinger Bands are a widely used technical analysis tool that help to determine the volatility of a security. They are plotted two standard deviations away from a simple moving average and can be used to identify potential buy and sell signals.

Bollinger Bands consist of three lines:

1. The simple moving average line: This line is the central band and represents the average price of the security over a set number of periods.
2. The upper band: This line represents the upper boundary of the security's price and is plotted two standard deviations above the moving average.
3. The lower band: This line represents the lower boundary of the security's price and is plotted two standard deviations below the moving average.

Bollinger Bands are used by traders and investors to identify when a security may be overbought or oversold, and to determine when to enter or exit a trade. For example, when a security's price touches the upper band, it may indicate that the security is overbought, and when it touches the lower band, it may indicate that the security is oversold.

It is important to note that Bollinger Bands are not a guarantee of future performance and should be used in conjunction with other forms of analysis, such as technical and fundamental analysis, to make informed investment decisions. Additionally, past performance is not always indicative of future results.