Bollinger Bands Crude Oil Indicator and Oil Price Volatility

When crude oil price volatility is high; crude oil prices close far away from the moving average, the oil Bollinger Bands width increases to accommodate more possible crude oil price action movement which can fall within 95% of the mean.

Bollinger bands oil indicator will widen as crude oil price volatility widens. This will show as bollinger band bulges around the crude oil price. When the oil bollinger bands widen like this it is a continuation oil pattern and crude oil price will continue moving in this direction. This is normally a continuation oil signal.

The Bollinger bands oil indicator example shown below illustrates the Bollinger bulge.

High Oil Price Volatility - Crude Oil Bollinger Band Indicator - Bollinger Band Bulge

When crude oil price volatility is low: crude oil prices close closer towards the moving average, the width decreases to reduce the possible crude oil price action movement which can fall within 95% of the mean.

When crude oil price volatility is low crude oil price will start to consolidate waiting for crude oil price to breakout. When the oil bollinger bands indicator is moving sideways it is best to stay on the sidelines and not to place any crude oil trades.

The Bollinger bands indicator examples is shown below when the oil bollinger bands narrowed.

Low Oil Price Volatility - Crude Oil Bollinger Band Indicator - Bollinger Bands Squeeze