Bollinger Band squeeze — low volatility

Bollinger Bands are drawn around a moving average, with the outer bands offset by the standard deviation of price — so band width directly reflects volatility. When daily candles tighten and deviation drops, the bands narrow: that is the squeeze. Traders watch these quiet stretches because low-volatility periods in markets usually give way to high-volatility ones — energy builds up while price sits in a narrow range.

A squeeze says nothing about the direction of the next move, so it is confirmed with other states: rising volume, the sign of the MACD histogram, and price position relative to long-term averages. Typical false signals are a prolonged squeeze that lasts longer than the observer expects, and a false breakout where price pokes outside the bands and immediately returns to the range. A squeeze is therefore treated as a readiness condition, not a standalone signal.