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Anchors the Bollinger Band system to the 20-period simple moving average, exposing the central tendency around which volatility is measured.
The 20-period Bollinger middle line is usually a moving average of the price. It is the center of the Bollinger Band.
The calculation:
Middle Band = 20-period Simple Moving Average (SMA)
Role in Bollinger Bands:
- Band center: The baseline from which upper and lower bands are calculated
- Trend indicator: Direction of the middle band shows overall trend
- Reversion target: Price often returns to the middle band after extremes
- Support/resistance: Can act as dynamic support in uptrends, resistance in downtrends
Trading applications:
- Trend direction: Rising middle band indicates uptrend; falling indicates downtrend
- Entry/exit point: Middle band can serve as entry or exit level
- Profit target: After moves to outer bands, middle band is a common target
- Stop placement: Some traders place stops near the middle band
Interpretation with other bands:
- Price above middle: Generally bullish, especially if middle band is rising
- Price below middle: Generally bearish, especially if middle band is falling
- Crossing the middle: May signal shift in momentum or trend
The middle band provides context for interpreting price position within the Bollinger Bands and serves as a key reference point for mean reversion strategies.
How it relates
Bollinger Mid (20)+Bollinger Bandwidth (20)Bollinger bandwidth measures how wide the bands are relative to the middle line. Wider bands mean higher volatility.=Bollinger Upper (20)The upper Bollinger band is the mid line plus a volatility buffer. Price touching it can signal strong upside or possible overextension.
Bollinger Mid (20)−Bollinger Bandwidth (20)Bollinger bandwidth measures how wide the bands are relative to the middle line. Wider bands mean higher volatility.=Bollinger Lower (20)The lower Bollinger band is the mid line minus a volatility buffer. Price touching it can point to strong downside or possible exhaustion.