Bollinger Bands are curves drawn in and around the price structure that define high and low on a relative basis. The base of the bands is a simple moving average. A measure of volatility, standard deviation, is used to set the width of the bands making them fully adaptive to changing market conditions. The defaults are bands spread above and below a 20-day simple moving average by two standard deviations. Bollinger Bands are used in numerous ways. They can be used to aid chart pattern recognition. They can be combined with other indicators to identify entry and exit points. They can be used to identify areas of compression and to spot the ends of extended moves. John Bollinger, CFA, CMT www.BollingerBands.com