Bollinger Bands is a technical analysis tool invented by John Bollinger in the 1980s, and a term trademarked by him in 2011. Having evolved from the concept of trading bands, Bollinger Bands and the related indicators %*b* and *bandwidth* can be used to measure the “highness” or “lowness” of the price relative to previous trades. Bollinger Bands are a volatility indicator similar to the Keltner channel.

Bollinger Bands consist of:

- an
*N*-period moving average (MA) - an upper band at
*K*times an*N*-period standard deviation above the moving average (MA +*Kσ*) - a lower band at
*K*times an*N*-period standard deviation below the moving average (MA −*Kσ*)

Typical values for *N* and *K* are 20 and 2, respectively. The default choice for the average is a simple moving average, but other types of averages can be employed as needed. Exponential moving averages are a common second choice. Usually the same period is used for both the middle band and the calculation of standard deviation.