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/terminology/bollinger-bands-definition/

Bollinger Bands

Description

Bollinger Bands are a volatility indicator composed of three lines: the middle line represents the stock price’s 20-day simple moving average (SMA), while the two outer bands are positioned two standard deviations above and below this center line. This configuration allows the bands to expand and contract with market volatility, aiding traders in identifying overbought or oversold conditions.

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