These provide a relative definition of price highs and lows. Bollinger bands are charted by calculating a simple moving average of the closing price, then creating two bands a specified number of standard deviations above and below the moving average. These bands narrow and widen in line with volatility - narrow in calm markets and wide in volatile markets. The narrowing of the bands often indicates the start of a new trend, which is confirmed when prices break and close out of the band.
