Bollinger Bands are three lines drawn on a price chart. The middle line is a 20-period moving average. The upper and lower bands sit two standard deviations above and below it. Standard deviation measures how spread out the data is, so the bands widen when prices are swinging wildly and narrow when prices are calm.

About 95% of price action stays within the bands. When price touches or exceeds the upper band, the stock is statistically "expensive" relative to its recent range. When it touches the lower band, it's statistically "cheap." This doesn't mean it will immediately reverse (strong trends ride the bands for extended periods), but it flags when price is stretched.

The most actionable pattern is the "squeeze." When the bands contract unusually tight, it means volatility has dried up. Markets tend to alternate between low and high volatility, so a squeeze often precedes a big move. You don't know which direction, but you know something is likely coming.