It needs to be understood at the very outset that the pair of Bollinger bands are not intended to be used on its own. Use the pair to confirm signals given with other indicators. That means Bollinger Bands are not stand alone indicators in their own right. They are useful as supplementary tools to confirm, ratify or reinforce your view on the stock or the markets.

Now let us look at the interpretation. When the bands tighten during a period of low volatility, it raises the likelihood of a sharp price move in either direction. This may begin a trending move. Watch out for a false move in opposite direction which reverses before the proper trend begins. That is why you need to treat the interpretation of Bollinger Bands more cautiously compared to other indicators. On the other hand, when the bands separate by an unusual large amount, volatility increases and any existing trend may be ending. This may be the end of a positive trend or a negative trend and you can ratify your original view with the Bollinger Band indicators.