Understand the construction
Bollinger Bands place upper and lower envelopes around a moving average using a measure of price dispersion. A common configuration uses 20 periods and two standard deviations, although settings can vary. The bands therefore change with recent volatility instead of maintaining a fixed distance. State the input price, timeframe and parameters before comparing a band position across instruments or evaluating a historical example.
Avoid a mechanical reading
A touch of the upper band does not automatically mean sell, and a touch of the lower band does not automatically mean buy. Strong trends can remain near a band. Narrowing bands describe reduced recent dispersion, but do not establish the direction of the next move. Treat changes in width and location as context that needs an explicit, separately tested trading hypothesis.
Test both trend and range conditions
A mean-reversion idea and a breakout idea make different assumptions about what happens after a band interaction. Evaluate them separately rather than switching explanations after the outcome is known. Include false breaks, transaction costs and changing volatility. Band distances are not probability guarantees for future prices. FYLU's educational presentation does not validate a specific setting or provide an automated Bollinger Bands strategy.