Bollinger Bands are a built-in MT4 volatility indicator. A middle line tracks a 20-period moving average, and an upper and lower band sit two standard deviations away — so the bands widen when the market gets volatile and squeeze together when it calms down.
How to add Bollinger Bands in MT4
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Open the indicator
In MT4, click
Insert ▸ Indicators ▸ Trend ▸ Bollinger Bands. -
Set the period and deviations
Leave the defaults — period 20, deviations 2 — or adjust them, applied to Close.
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Click OK
Three lines appear over price: a middle 20-period average and an upper and lower band two standard deviations away.
How to read Bollinger Bands
- Volatility — wide bands mean high volatility; narrow bands, low volatility.
- The squeeze — tightly contracted bands often precede a larger move (direction unknown).
- Band touches — price reaching a band shows it's stretched, but is not a reversal signal by itself.
Limitations
In a strong trend, price can ride the upper or lower band for a long stretch — so fading every band touch is a classic mistake. Bollinger Bands describe volatility; they don't predict direction. Pair them with other tools and a stop loss, and test on a demo. Nothing here is financial advice; most retail traders lose money.
Test Bollinger Bands on a free demo
Add Bollinger Bands to a free MT4 demo and watch how they behave through calm and volatile markets before risking real money.
⚠ Trading forex and CFDs is high-risk and most retail traders lose money. This is not financial advice.
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Related
See the best MT4 indicators guide. Other indicators: Moving Average, RSI, and Stochastic.
Frequently asked questions
What are Bollinger Bands?
Bollinger Bands are a volatility indicator: a middle line (a 20-period moving average) with an upper and lower band set a number of standard deviations away (usually two). The bands widen when volatility rises and contract when it falls.
How do I add Bollinger Bands in MT4?
Click Insert ▸ Indicators ▸ Trend ▸ Bollinger Bands, keep the defaults (period 20, deviations 2) or adjust them, and click OK. The three bands plot directly over price on your chart.
What is a Bollinger Band squeeze?
A squeeze is when the bands contract tightly, signalling low volatility. Because volatility tends to cycle, a squeeze often precedes a larger move — but it doesn't tell you the direction, only that a bigger move may be coming.
Does price reverse when it touches a band?
Not reliably. A touch of the upper or lower band shows price is statistically stretched, but in a strong trend price can 'walk the band' and keep going. Treating every band touch as a reversal is a common and costly mistake.
What are the best Bollinger Band settings?
The defaults — a 20-period average with 2 standard deviations — are what Bollinger himself suggested and remain the standard. Some traders widen the deviations on higher timeframes. Test changes on a demo rather than assuming a setting is better.
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