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Bollinger Bands width Technical Analysis & Bollinger Bands width Signals

Developed & Created by John Bollinger.

This technical indicator is derived from the original and initial Bollinger technical indicator.

Bandwidth is a measure of width of Bollinger Band

Calculation

Bandwidth = Upper Band - Lower Band

Middle Band

Bollinger Band-width Technical Analysis - Bollinger Bandwidth Indicator Guide

This is an oscillator technical indicator, based on the theory that price and volatility occurs in cycles.

Periods of high volatility is followed by periods of low volatility.

When volatility is high, bands are far apart, the band-width also will be wide apart.

When volatility is low, Bands are narrow and the band-width trading technical indicator also will be narrow.

The blue line represents the highest Bandwidth value reading for a previous number of periods.

This line also identifies the periods of high volatility

The red-line represents the lowest Band-width value reading for a previous number of specified periods.

This line also identifies periods of low market volatility

FX Technical Analysis and How to Generate Trading Signals

Consolidation - Bollinger Squeeze

Bollinger Bandwidth is used to identify the squeeze, which's a consolidation period of price, after which the price then breaks-out in a given direction.

The Signals are derived & generated when there is a price break out - signal is derived and generated by the indicator beginning to go upwards after touching the red line. When the bandwidth line starts and begins to move upwards it signals that market volatility is rising as the price is breaking-out.

Bollinger Band-width Technical Indicator - How to Add Forex Bollinger Band-width Indicator on Chart

Squeeze

Breakout Signal After Bollinger Bandwidth Squeeze

Breakout Signal After Bandwidth Squeeze

However, this is a directionless technical indicator & needs to be combined together with another technical indicator such as the MA(Moving Average) to figure out & determine the direction of the trend/ Breakout.

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