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Bollinger Bands is a technical analysis indicator used to measure market volatility and identify potential overbought or oversold conditions. It consists of three lines plotted around a price chart:

a middle line, which is typically a moving average

an upper band

a lower band

The upper and lower bands expand when volatility increases and contract when volatility decreases. When price approaches or touches the upper band, the asset may be considered overbought. When price approaches the lower band, it may be considered oversold. Traders use Bollinger Bands to help spot possible trend reversals, breakouts, and continuation patterns.

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