Developed in the 1980s, Bollinger Bands are among the most elegant and most reliable of technical analysis tools to keep a rein of risk. In fact, they've become a standard tool to compare price and critical indicator movements in a volatile market. When it comes to watching price movements of any instrument, it helps to have an understanding of where price is trading relative to its average.
That's where Bollinger Bands come in. They assess recent trading activity using the very powerful statistical measurement tool, the standard deviation, which provides a value within which the price has a probability of not moving further. It is possible to see when a new trend may be developing.