Source

Bollinger band is a technical indicator that uses low and high price movements.
The indicator was developed in 1980 by John Bollinger in which the reading is to determine the overbought and oversold.

It's used

1. It could be used to make entry and exit of a trade.
2. Bollinger band is easy method to determine overbought and oversold.
3. Volatility measurement:

The band is used to measure the volatility (high move)

High Bollinger Bands, by the way, indicate a higher probability of volatility as the price drops. However, as the price rises, the Bollinger Band increases in volatility as the price moves up. High volatility, by the way, is typically when a security is going through a significant change in direction (positive or negative).

The Bollinger Band volatility, as you may already know, is the probability of an asset moving in the very near term. The higher the volatility, the more likely a decline is to occur. What the Bollinger Band does, is to measure volatility of an asset.

Source

The way it works is that as the price of a given asset goes down, the short-term Bollinger Band volatility changes and gets increased. When the price of the asset goes up, the Bollinger Band volatility decreases, and hence the volatility gets decreased.

Bollinger Bands are never going to produce your ideal trade signal if used alone. Most people use them incorrectly, but once you understand how they work, and how to put them to good use, they can be a great way to add strength in a limited time, with relatively little equipment.

How to trade with Bollinger Band

Bollinger Band uses two method to determine a trade.

1. Period : The period can be used by its default settings.
2. Standard deviation
   The standard deviation is useful for determining short-term volatility, but not so much in predicting long-term volatility.

• Explain in your own words the Bollinger Band
• The uses
• Explain any method of trading with it