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Bollinger Bands Indicator and Price Volatility

When price volatility peaks, the gold prices tend to be significantly distanced from the moving average, causing an expansion of the Bollinger Band width to accommodate a larger range of potential price movements, which can fall within 95 percent of the mean.

The Bollinger Bands indicator for XAUUSD will expand in width as the price exhibits increased volatility. This expansion manifests as the bands bulge outward around the current price levels. When the Bollinger Bands widen in this manner, it signals a continuation pattern within the XAUUSD context, suggesting the market is likely to sustain its current directional movement. This generally serves as a continuation signal.

The illustration of the Bollinger band xauusd indicator provided below demonstrates the Bollinger bulge.

Bollinger Band & Price Volatility, Analyzing High Low Volatility Markets using Bollinger Bands

High Price Volatility - Gold Bollinger Band Indicator - Bollinger Band Bulge

Low volatility narrows gold prices around the moving average. The band shrinks to cover 95% of price swings near the mean.

When price changes are small, the price will begin to get stable as it waits for a price breakout. When the bollinger bands tool is moving to the side, it's best to wait and not make any trades.

The subsequent examples of the Bollinger Bands indicator are demonstrated when the bands exhibit a contraction.

Bollinger Band & Price Volatility, Analyzing High Low Volatility Markets using Bollinger Bands Indicator

Low Price Volatility - Gold Bollinger Band Indicator - Bollinger Band Squeeze

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