John Bollinger and Bollinger Bands
Bollinger built bands that adapt to volatility, and taught that a touch of the band is a tag, not a signal.
Trade a real day like John Bollinger
A real market day with the date hidden. Run the checklist on the chart, then buy, sell or stay out: the real candles answer.
Check every point of the list before you decide. Stay out if the setup is not there.
Who they were
John Bollinger is an American analyst, a CFA and CMT, who created Bollinger Bands in the early 1980s while working as a market analyst on television.
He explained the method in "Bollinger on Bollinger Bands" (2001), including %b, bandwidth and the squeeze.
Principles and rules
1. Relative high and low
The bands define what is high and low relative to recent volatility.
2. Tags are not signals
A touch of the upper band can be strength in a trend or excess in a range.
3. The squeeze
Very narrow bands mark low volatility, which tends to be followed by expansion.
4. Combine indicators
Use the bands with an independent indicator, such as a momentum or volume measure.
Key lessons
- Know the regime: range or trend.
- Volatility cycles between contraction and expansion.
- Confirmation should come from a different kind of indicator.
Strategies from this method
How to practise it
The Bollinger mean reversion and squeeze strategy pages have the rules. Bollinger Bands are built into Candlemind's chart.
Frequently asked questions
What are the default Bollinger Band settings?
A 20-period moving average with bands at two standard deviations.
What is the Bollinger squeeze?
A period when the bands are unusually narrow, often before a strong move.
Summaries and paraphrases of public books and interviews, for education. Not investment advice.