Download the Schwab app from iTunes®Get the AppClose

Trader Q&A: How Do I Use Bollinger Bands®?

Schwab's Trading Services Team discusses how to effectively incorporate Bollinger Bands into your trading.

Click to show the transcript

[Lou] We have question from Tom in Minnesota, "How do I use Bollinger Bands when trading stocks?"

[Robert] You know, I think—okay, Bollinger Bands tend to be a volatility product, tried to gauge that. There are a couple different ways to use them. A lot of traders use them to try and trade in between. Buy when it hits the lower band. Sell when it hits the higher band. That's one way to use them. Another way to use them is breakouts of the band. When it gets above the band or below the band, [think to buy] when it gets above, or sell when it gets below. Those are a couple different ways to use them. But I think that circles back to, hey, any of these additional things that we're going to use in our trading, we have to understand how they work. You know, you have to educate yourself around it. So I guess I would say, Tom, in our learning center on our Schwab Web site, we've got a wonderful class on Bollinger Bands that we go over all the different ways that you can use to use Bollinger Bands in your trading. I think I would take a look at that first. Make sure you understand how they work, the pluses and the minuses. If you're comfortable with it, then start applying it to your trading.

Schwab has tools to help you mentally prepare for trading

Learn more >

Talk trading with a Schwab specialist anytime.
Call 888-245-6864
M-F, 8:30am - 9:00pm EST

Get 500 Commission-Free Online Equity and Options Trades for Two Years

Learn More >

Restrictions apply: The $4.95 commission does not apply to foreign stock transactions, large block transactions requiring special handling, or restricted stock transactions. All broker-assisted and automated phone trades are subject to service charges. A minimum deposit of $1,000 is required to open most Schwab brokerage accounts. Waivers may apply. See the Charles Schwab Pricing Guide for full fee and commission schedules. Employee equity compensation transactions are subject to separate commission schedules.

Options carry a high level of risk and are not suitable for all investors. Certain requirements must be met to trade options through Schwab. Covered calls provide downside protection only to the extent of the premium received and limit upside potential to the strike price plus premium received. With long options, investors may lose 100% of funds invested. Multiple-leg options strategies will involve multiple commissions. Please read the Options Disclosure Document titled Characteristics and Risks of Standardized Options .

Any opinions expressed herein are subject to change without notice at any time.

Schwab does not recommend the use of technical analysis as a sole means of investment research.

Past performance data should not be construed as indicative of future results.


Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.