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Here is a decent definition of Bollinger Bands for those who do techincal analysis trading with a set of rules

(Last Updated On: September 19, 2012)

Here is a decent definition of Bollinger Bands for those who do techincal analysis trading with a set of rules

Bollinger Bands Explained

What are they? Bollinger Bands are a pair of trading bands representing an upper and lower trading range for a particular market price. A market price or currency pair is expected to trade within this upper and lower limit as each band or line represents the predictable range on either side of the moving average. The lines are plotted at standard deviation levels above and below the moving average. This trading band technique was introduced by John Bollinger in the 1980s.

Why use them? Bollinger Bands can be very useful trading tools, particularly in determining when to enter and exit a market position. For example: entering a market position when the price is midway between the bands with no apparent trend, is not a good idea. Generally when a price touches one band, it switches direction and moves the whole way across to the price level on the opposing band. If a price breaks out of the trading bands, then generally the directional trend prevails and the bands will widen accordingly.

http://www.forexpros.com/education/technical-analysis/bollinger-bands-explained-2630

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