Bollinger Band

A Bollinger band is a charting tool which depict highs and lows in relation to each other on an ongoing, dynamic basis. Bollinger bands are made up of an envelope (an upper and a lower line tracing the highs and lows of a rate) and a third line which traces the rate’s simple moving average.

This type of chart is primarily used in chart analysis of securities markets to measure the volatility of investment vehicles.

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Daniel Dreier is editor and personal finance expert at moneyland.ch.

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