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What Are Bollinger Bands

Bollinger Bands are a twenty-day moving average with a line drawn two typical steps above it and two below, where a typical step is how far the last twenty closes strayed from their average: the band widens when the days are big and narrows when they are small. This paper shows you gold's bands of 2025 drawn from real closes, the idea as a river whose banks stand back where the water runs wild, the sleeve on the daily chart, the arithmetic for one day, and the dialog that adds them on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
8
Reviewed by
Saman Rahbar

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An average with a band round it

Bollinger Bands are a twenty-day moving average with a line drawn above it and another below, and the band between them shaded. The lines sit two typical steps either side of the average, where a typical step is how far the last twenty closes strayed from that average. So when the days are big the band is wide — 521 dollars top to bottom on gold on 22 April 2025 — and when the days are small it narrows, to 144 dollars on 1 August. The band is the recent size of the days, drawn round the average.

A river between its banks

The picture is a river between its banks. Where the water runs wild the banks stand far back; where it is calm they close in. The dashed line is the river's middle, the twenty-day average. The banks are the bands, set two typical steps either side of the middle, and a typical step is measured from how far the last twenty days actually strayed. The banks do not hold the water in. They are drawn from where the water has been, and they move as it moves.

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