95% of price action will take place within the Bollinger bands and thus the Bands act as strong areas of support and resistance when the market is without trend. It is possible at times like this to successfully trade the price rising or falling from one Bollinger line to the other.
When a trend begins and the volatility of the market increases thus the spacing of the Bollinger Bands will widen, as the trend slows down the Bollinger bands will narrow.
Bollinger Bands consist of a central line and two outer bands - one higher and one lower -which will encompass the majority of any price action.
The middle line is a simple moving average
The upper band is the SMA plus 2 standard deviations
The lower band is the SMA minus 2 standard deviations
The standard deviation mentioned above is a statistical term that relates to price volatility and ensures that the bands react quickly to price movements.