Bollinger Bandwidth Indicator

The Bollinger Bandwidth indicator plots the width of the Bollinger Bands (the distance between the higher band and the lower band). The width of the Bollinger Bands can notify traders over decrease in volatility, also known as the Squeeze.

Squeeze happens when the Bollinger Bands are very close to each other, and create a tight range for price to oscillate. This eventually leads to a powerful breakout with strong momentum. The indicator can also be used to show the power of trend. When the distance between the bands increases, the trend is more powerful.