LoginEnter the platform free
DOMINA › Technical analysis › The indicators › Bollinger Bands

Bollinger Bands: how to calculate and read them

InteractiveChange the band parameters yourselfYou pick the sessions and the deviations: the real chart redraws and counts how many closes stay inside the bands.Try it →

Bollinger Bands on a real stock

Open in the chart
Volatility indicator · 20-day average · 2 standard deviations · John Bollinger, early 1980s
Bollinger Bands
Example: Apple, sessions of 2025 · prices adjusted for dividends and corporate actions
volumeperiod start 242.75286.19171.83273.08Jan 2, 2025Apr 3, 2025Jul 3, 2025Oct 1, 2025Dec 30, 2025
5.9%band width, as a % of the mean
Sessions249Closes outside35Narrowest bands3.2%Widest bands30.6%

In amber the 20-day average, in blue the bands at two standard deviations; below, how wide they are.

InteractiveRead a session. Click a day on the chart above: I tell you where the close sits relative to the bands.

2σ the distance of the bands from the mean two standard deviations of the last 20 closes, above and below

What Bollinger Bands are made of

Fig. 1 · Anatomy

upper bandmean + 2 standard deviations20-day averagelower bandmean − 2 standard deviationslow volatility: narrow bandshigh volatility: wide bands
  • The dashed line is the average of the last 20 closes.
  • The two bands sit 2 standard deviations from the average, one above and one below.
  • Calm market: narrow bands. Turbulent market: wide bands.
  • The distance is not fixed: volatility sets it.
mean = simple average of the last n closes  ·  bands = mean ± k × standard deviation
%B = (close − lower) / (upper − lower)  ·  width = (upper − lower) / mean

How to read them

Fig. 2 · %B

%B = 1%B = 0.5%B = 01.2outside, above1.00.70.25−0.2outside, below
  • %B tells you where the close sits between the bands.
  • 0 = on the lower band, 0.5 = on the mean, 1 = on the upper band.
  • Below 0 or above 1: the price is outside the bands.

Fig. 3 · The squeeze

the narrowest bands in six monthsthen a large movethe squeeze does not tell the direction
  • The bands tighten to a six-month low.
  • The market is quiet: it usually does not stay that way for long.
  • The squeeze does not tell the direction: the breakout does.

Fig. 4 · Walking the bands

the close touches the upper band, again and againin a strong trend the touches are not sell signals
  • In a strong trend the price touches the band many times in a row.
  • A touch is not a sell signal.
  • As long as the price walks the band, the trend is alive.

Fig. 5 · The double top

1st peak, at the upper band2nd peak, inside the bandthe «M» double top: the push runs out
  • First peak: it reaches the upper band.
  • Second peak: it stays inside the band.
  • Same price, less strength: the push is running out.

Rules of use

what Bollinger recommends
mean

The mean is the reference

  • the bands measure how far the price strays from its mean
  • the 20-day average is the trend of one month of trading

A touch is not a signal

  • in a trend the price walks the band for weeks
  • selling at the first touch means getting out too early

Narrow bands, a move is near

  • width at a six-month low is the squeeze
  • the breakout tells the direction, not the squeeze
%B > 1

Outside the bands is an extreme

  • %B above 1 or below 0: the price is two deviations away
  • on its own, a close outside means continuation, not reversal

With another indicator

  • Bollinger pairs them with a volume or momentum indicator
  • the bands say where; the other one confirms

The calculation, step by step

Apple, close of
The Bollinger Bands calculation for Apple at the close of , with 20 sessions and 2 deviations
StepCalculationResult
Average of the last 20 closessum of the closes / 20$276.19
Standard deviationdispersion of the same 20 closes$4.05
Upper band276.19 + 2 × 4.05$284.29
Lower band276.19 − 2 × 4.05$268.09
%B(273.08 − 268.09) / (284.29 − 268.09)0.31
Width(284.29 − 268.09) / 276.195.86%
The last five sessions of 2025 for Apple, in dollars
SessionClose20-day avgUpper bandLower band%B
272.36277.31285.45269.170.20
273.81277.15285.43268.870.30
273.40276.94285.38268.510.29
273.76276.69285.19268.190.33
273.08276.19284.29268.090.31

InteractiveTry the parameters

the chart at the top changes with you
Sessions in the average
Standard deviations
Closes inside the bands85.9%over 249 sessions in 2025
The normal curve95.4%what the formula promises
Above the upper band20closes
Below the lower band15closes
With 20 sessions and 2 deviations, in 2025 the closes of Apple stayed inside the bands on 85.9% of days; a normal curve promises 95.4%. Prices have extreme days more often than that.

Where to go from here

The indicators · Volatility

The other lessons in the guide

What is technical analysis

  • the study of price and volume to recognise the trend and the levels
  • three premises: price discounts everything, trends, history repeats
  • exercise: uptrend, downtrend or sideways on three real charts

Candlestick chart

  • the four prices of a session: body and shadows
  • green and red, long and short bodies, long shadows, the doji
  • find the candle on a real chart: the judge says yes or no with the numbers

Uptrend: higher highs and higher lows

  • higher highs and higher lows: how to recognize an uptrend
  • swing points, and the two signals that end a trend
  • mark the higher lows yourself on a real chart

Support and resistance

  • the level where the decline stopped, and the one where the rise stopped
  • touches, time and volume: how much a level counts; once broken, it switches roles
  • find the level yourself on a real chart: the judge counts the touches
Bollinger Bands on Apple, in the chartopens on the stock: switch the bands on from the indicator catalogueOpen a free accountcharts, indicators and watchlists without paying anything
The technical analysis guideevery lesson and the A-Z indexWhat a subscription includesscanner, alerts and the analysis tools on every market

Frequently asked questions

What do Bollinger Bands indicate?

Whether the price is high or low relative to the last few weeks, measured by its own volatility. The middle band is a 20-day average; the outer bands sit two standard deviations away.

What are the standard Bollinger Bands parameters?

A 20-day simple average and bands at 2 standard deviations. Bollinger suggests 1.9 deviations with a 10-day average and 2.1 with a 50-day one.

Does the price stay inside the bands 95% of the time?

No: 95% holds for a normal curve. In 2025 the closes of Apple stayed inside the classic bands on 85.9% of days.

What is the Bollinger squeeze?

The moment when the bands are the narrowest of the last six months. It often precedes a large move, but does not indicate its direction.

Method and sources

The sources of this page: the books are cited, the text is ours
Source
John Bollinger, Bollinger on Bollinger Bands, McGraw-Hill, 2001.
John J. Murphy, Technical Analysis of the Financial Markets: the chapter on moving averages, envelopes and bands.
Charles D. Kirkpatrick and Julie R. Dahlquist, Technical Analysis (CMT curriculum): envelopes, channels and bands.

The chart uses the 2025 sessions of Apple, Microsoft, Nvidia, Coca-Cola, adjusted for dividends and corporate actions. The numbered figures are diagrams drawn to explain, not prices. This guide explains how the tools work: it does not contain investment recommendations and promises no returns. Our method · licence · report an error.