A volatility envelope
Bollinger Bands plot a moving average with two lines set a number of standard deviations above and below it. The bands widen when volatility rises and pinch in when it falls. Price spends most of its time inside them.
The trap again: 'price touched the upper band' is not a sell. In a trend, price can 'walk the band', riding the upper rail higher for weeks. The bands describe how stretched price is, relative to its own recent volatility.
The squeeze
When the bands pinch to their tightest in months (a 'squeeze'), volatility is coiled and a large move often follows — but the bands don't tell you which direction. Traders wait for price to break out of the squeeze, ideally on volume, before committing.
The squeeze and the walk
Two behaviours do the work. A squeeze — bands at their tightest in months — says volatility has coiled and a big move is likely, but not which way; you wait for the break, ideally on volume. And in a trend, price 'walking' the upper (or lower) band is a sign of strength, not a fade — treating every band touch as a reversal is the classic error.
Position and width, objectively
Two derived numbers make it less subjective: %B tells you where price sits within the bands (1 = upper band, 0 = lower), and BandWidth measures the squeeze. Use the middle band (the moving average) as your trend reference, and remember the bands are just a picture of recent volatility — which tends to expand and contract in cycles.