Bollinger Bandwidth
Identify volatility squeezes and expansion with Bollinger Bandwidth.
Concept
Bandwidth shows the percentage width of Bollinger Bands relative to the middle band.
Bandwidth = (Upper Band - Lower Band) / Middle Band × 100
- Low bandwidth = squeeze (bands tight)
- High bandwidth = volatility expansion
Squeeze Trading
- Bandwidth at 6-month low = "squeeze"
- Prepare for breakout when bandwidth is at extreme lows
- Use momentum to determine direction
- Combine with Keltner for TTM Squeeze