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Bollinger Band Width

Measures how wide or narrow Bollinger Bands are relative to price, indicating whether volatility is expanding or contracting.

Written by the Vorzep Team

CryptoTradingTechnical Analysis

Bollinger Band Width Calculator Volatility Indicator

BW = (UB − LB) / MB
BW = Band Width  ·  UB = Upper Band  ·  LB = Lower Band  ·  MB = Middle Band
⟹ Solve ⟷ BW, UB, LB, MB
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BW = (UB − LB) / MB  ·  Bollinger Band Width measures volatility; higher values indicate wider bands
Width = (Upper Band - Lower Band) / Middle Band
Bollinger Band Width

Variables

SymbolQuantityUnit
WidthBollinger band width
Upper BandSMA + 2 standard deviations
Lower BandSMA - 2 standard deviations
Middle BandSMA (middle band)

What it means

Bollinger Bands consist of a middle band (SMA) and upper/lower bands (SMA ± 2×standard deviation). The width indicates volatility: narrow bands suggest low volatility (compression), which often precedes a significant price move. This is used to identify potential breakouts and to gauge market conditions. Understanding band width helps traders anticipate volatility changes.

Worked example

Bollinger Band Width – Two Detailed Examples

Real‑World
Scenario: A stock has an upper band of 63,000, lower band of 58,000, and middle band of 60,500. Width = (63,000 - 58,000) / 60,500 = 5,000 / 60,500 = 0.0826 (8.26%). Wider bands indicate higher volatility. The trader uses this to assess market volatility and potential breakouts.
ParameterValue
Upper Band63,000
Lower Band58,000
Middle Band60,500
1Width = (63000 - 58000) / 60500 = 0.0826
Result 0.0826 ✓ 8.26% width
Scenario: Another asset has upper 3,200, lower 2,900, middle 3,050. Width = (3200 - 2900) / 3050 = 300 / 3050 = 0.0984 (9.84%). This higher width suggests more volatility than the first. The trader adjusts stop‑loss levels accordingly.
ParameterValue
Upper3,200
Lower2,900
Middle3,050
1Width = (3200 - 2900) / 3050 = 0.0984
Result 0.0984 ✓ Higher volatility
Insight: Bollinger Band width normalises the band spread by the middle band, providing a volatility indicator. Wider bands indicate higher volatility, often preceding breakouts.

Common mistakes

  • Bollinger Band width: Normalised measure of volatility.
  • Upper band: Middle band + (2× standard deviation).
  • Lower band: Middle band − (2× standard deviation).
  • Width: Increases during high volatility, decreases during low volatility.

Applications

Bollinger Band width measures the relative distance between the upper and lower bands, indicating volatility. Wider bands suggest high volatility, while narrower bands suggest low volatility. Traders use this to anticipate breakouts and to set volatility‑based targets. This metric is derived from the standard Bollinger Bands. Understanding bandwidth helps in identifying periods of consolidation and expansion.

  • Assessing market volatility and potential breakouts
  • Adjusting trading strategies based on volatility regimes
  • Identifying low‑volatility periods that may precede large moves
  • Setting stop‑loss and take‑profit levels based on volatility
  • Educational understanding of Bollinger Bands