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NISM Certifications · NISM-Series-XV: Research Analyst · Technical Analysis

In Bollinger Bands with standard settings, the upper and lower bands are placed relative to the middle band at:

Standard Bollinger Bands plot a 20-period simple moving average with upper and lower bands two standard deviations above and below it. The bands widen with volatility and narrow when volatility falls.

  1. AOne standard deviation above and below a 20-period simple moving average
  2. BTwo standard deviations above and below a 20-period simple moving averageCorrect
  3. CTwo percent above and below a 50-period exponential moving average
  4. DThe highest high and lowest low of the last 20 periods

Explanation

Bollinger Bands use a 20-period simple moving average as the middle band with bands at two standard deviations either side. Percentage envelopes and Donchian channels are different tools.

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