What the bands are
The middle band is a 20-period moving average. The upper and lower bands sit two standard deviations above and below it. Because they're built on standard deviation, the bands widen when volatility rises and contract when it falls.
Roughly 90% of price action stays inside the bands, so the bands frame what's 'normal' for the current conditions — and make it obvious when price is stretched.
The squeeze and the expansion
When the bands contract into a tight 'squeeze', volatility has dropped — and low volatility often precedes a large move. The squeeze warns that energy is building.
Crucially, the squeeze does NOT tell you which way the move will go. Wait for the breakout and confirm it with structure rather than guessing direction from the squeeze alone.
Why touching a band isn't a signal
In a strong trend, price 'rides' the upper (or lower) band for a long stretch. Shorting every tag of the upper band in an uptrend is a fast way to bleed out — a band touch means 'stretched', not 'reversing'.
The more useful reads: the middle band as dynamic support/resistance, and band width as a volatility gauge. Combine with trend and your risk plan; never trade a band touch on its own.