Trading Educators Blog
The Squeeze is the central concept of Bollinger Bands. When the bands come close together, constricting the moving average, it is called a squeeze. A squeeze signals a period of low volatility and is considered by traders to be a potential sign of future increased volatility and possible trading opportunities. Conversely, the wider apart the bands move, the more likely the chance of a decrease in volatility and the greater the possibility of exiting a trade. However, these conditions are not trading signals. The bands give no indication when the change may take place or which direction price could move. John Bollinger suggests using them with two or three other non-correlated indicators that provide more direct market signals. He believes it is crucial to use indicators based on different types of data.
Since Bollinger Bands are essentially a volatility indicator, they can be used with any momentum indicator of your choice. Stochastics, or RSI would be good choices.
Although the bands do not give trading signals in and of themselves, a Reversal Bar, occurring when the bands are showing extremely high volatility give an excellent entry point for a trade entry. I've shown how to do that in my webinar called " Trading with MORE Special Set-Ups."