Bollinger Bands plot an upper and lower band around a moving average, based on recent volatility. Wider bands mean higher volatility; narrower bands mean calmer markets.
Formula
Middle band = SMA_N(close)
σ = sample standard deviation of close over N bars
Upper band = Middle + k × σ
Lower band = Middle − k × σ
Defaults: N = 20, k = 2.
Typical settings
| Parameter | Default |
|---|---|
| Period | 20 |
| Deviation | 2 |
How traders interpret Bollinger Bands
- Touch or pierce lower band — Price is relatively low vs recent range (potential mean reversion buy in ranging markets).
- Touch or pierce upper band — Price is relatively high (potential sell or fade).
- Squeeze — Bands narrow before a volatility expansion.
Bands are not guaranteed support/resistance; in trends, price can “walk” along an outer band.
In dogabot
The Bollinger Bands rule emits:
- Buy when price is at or below the lower band
- Sell when price is at or above the upper band
Example
On SOL/USDT 15m with period 20 and dev 2, lower band = $142, upper = $158, close = $141.50. Price at the lower band often triggers a buy in the Bollinger rule. A close at $158.20 near the upper band would lean sell.