Separate band width from price direction
Traditional Bollinger Bands use a simple moving average as the center and bands a chosen number of standard deviations above and below it. Twenty periods and two standard deviations are common defaults rather than a universal optimum. BandWidth commonly expresses the distance between the bands relative to the middle average.
A low width becomes meaningful through comparison with the same instrument and settings over an appropriate history. Calling every narrow-looking area a squeeze after a large move creates hindsight bias. Define the reference window or threshold before observing the subsequent breakout, and keep direction as a separate question.
Width contracts from 8% to 2%
Assume the middle average is 100 dollars and the calculated standard deviation is 0.50. With a multiplier of two, the bands are 99 and 101; normalized width is (101 − 99) / 100 = 2%. Earlier bands at 96 and 104 around the same midpoint had 8% width. If standard deviation later reaches 1.50 with the midpoint still at 100, bands become 97 and 103, giving 6% width. That expansion describes larger dispersion; a completed close above or below a previously defined price boundary supplies separate directional evidence.
A band touch is not an automatic reversal
Prices can move along an outer band during a strong trend. A close outside a band can be followed by continuation or failure, so touching the upper band is not sufficient reason to assume a fall. Financial prices also do not justify a simple claim that two-standard-deviation bands contain exactly 95% of future observations.
Review the contraction and the actual price exit
On an available completed price chart, identify the consolidation boundaries before reviewing its exit. If band values are calculated separately, retain the window, multiplier and width history. Compare the next completed close with both the price range and its subsequent reaction. This explanation does not assert that Student Wyckoff Pro provides a Bollinger Band overlay.
Primary sources
Sources explain the mechanics and limitations; the editorial examples use invented numbers rather than market quotations.
Your next practical step
Use completed price candles to examine a consolidation and its eventual exit.
Open the first-chart instructions ↗