Bollinger Bands are a widely used technical tool that consists of a middle band (usually a 20-period simple moving average) and two outer bands that are typically two standard deviations above and below the middle band. The bands expand and contract based on price volatility.

Traders utilise Bollinger Bands to identify potential overbought and oversold conditions. When the price touches or moves outside the bands, it may signal a trend continuation or reversal. Bollinger Bands can be combined with other indicators to confirm trading signals and improve overall analysis. By incorporating Bollinger Bands into their analysis, traders gain insights into price volatility and potential trading opportunities.