What is Bollinger Bands?

Bollinger Bands are a technical analysis device created by trader John Bollinger in 1983 that have become one of the most popular tools used by traders today. Bollinger Bands use moving averages and standard deviation to create a range of price movements. On a trading chart, Bollinger Bands are visually represented by a centerline based on a moving average, with a band below and above the centerline based on standard deviation. Bollinger Bands can help indicate if prices have moved outside of the range of historical deviation, and can be used to identify a number of market scenarios in real time.