Bollinger Bands Stock Index Indicator and Indices Price Volatility

When stock index price volatility is high; stock indices prices close far away from the moving average, the stock indices Bollinger Bands width increases to accommodate more possible stock index price action movement that can fall within 95% of the mean.

Bollinger bands stock indices indicator will widen as stock index price volatility widens. This will show as bollinger band bulges around the stock indices price. When the stock indices bollinger bands widen like this it is a continuation stock indices pattern and stock index price will continue moving in this direction. This is normally a continuation stock indices signal.

The Bollinger bands stock indices indicator example illustrated below illustrates the Bollinger bulge.

High Indices Price Volatility - Stock Indices Trading Bollinger Bands Stock Index Indicator - Bollinger Bands Bulge

When stock index price volatility is low; stock indices prices close closer towards the moving average, the width decreases to reduce the possible stock index price action movement that can fall within 95% of the mean.

When stock index price volatility is low stock index price will start to consolidate waiting for stock index price to breakout. When the stock indices bollinger bands indicator is moving sideways it is best to stay on the sidelines and not to place any stock index trades.

The Bollinger bands indicator example is shown below when the stock indices bollinger bands narrowed.

Low Indices Price Volatility - Stock Indices Trading Bollinger Bands Stock Index Indicator - Bollinger Bands Squeeze