INDICATORS · COMPRESSION

Bollinger Band Width vs ATR: Two Ways to Measure Compression

Bollinger Band width and ATR both measure volatility, but one uses closing prices' standard deviation and the other uses bar ranges. They can disagree about compression.

Short answer

Bollinger Band width = (upper − lower) ÷ middle, based on the standard deviation of closes over a period; ATR averages true ranges (high−low including gaps). Band width can contract while ATR stays high when closes cluster but intrabar ranges remain wide (wicky, choppy markets). Use band width to spot quiet closing behaviour and ATR for actual intrabar movement; a true squeeze shows both contracting.

Two measures

BB width vs ATRBB width vs ATR. Left, Bollinger Band width: Std. dev. of closes; Ignores wicks; Relative to middle band; Sensitive to close clustering. Right, ATR: Average true range; Includes wicks and gaps; In price units; Reflects intrabar movement.BOLLINGER BAND WIDTHStd. dev. of closesIgnores wicksRelative to middle bandSensitive to close clusteringATRAverage true rangeIncludes wicks and gapsIn price unitsReflects intrabar movement
Closes vs ranges. Original ChartsPod editorial graphic.

When they disagree

MarketBB widthATRReading
Quiet, tightLowLowTrue compression
Wicky chopLowHighCloses calm, intrabar volatile
TrendingHighHighExpansion
Illustrative percentiles over 1 yearIllustrative percentiles over 1 year: BB width percentile 8 th; ATR% percentile 55 th.ILLUSTRATIVE PERCENTILES OVER 1 YEARBB width percentile8 thATR% percentile55 th
Bands say squeeze; ATR says not really. Original ChartsPod editorial graphic.

Using both

Compression checkCompression check: BB width in low percentile; ATR% also in low percentile; Same lookback window; Check wicks visually; Define breakout rule in advance.COMPRESSION CHECKBB width in low percentileATR% also in low percentileSame lookback windowCheck wicks visuallyDefine breakout rule in advance
Both contracting = stronger squeeze. Original ChartsPod editorial graphic.

Related: ATR in Dollars vs ATR Percent: Compare Volatility Across Coins.

Example: a false squeeze

Illustrative: over two weeks, Bollinger width on the 4-hour chart falls to its lowest percentile in a year. ATR% stays near its median because each 4-hour bar has long wicks in both directions as liquidations hit both sides. A breakout trader expecting a quiet coil gets stopped out repeatedly by wicks. Checking ATR would have shown the market was not quiet, only its closes were.

A practical squeeze rule might require Bollinger width below its 15th percentile and ATR% below its 25th percentile over the same window.

Conclusion

Require both Bollinger width and ATR% to be low before calling a volatility squeeze.

Plot Bollinger Bands and ATR together.

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Questions readers ask

What is Bollinger Band width?

(Upper − lower) ÷ middle band.

Why does ATR stay high while bands narrow?

Intrabar ranges remain wide while closes cluster.

Which signals a squeeze?

Both contracting together is more reliable.

Sources and methodology

Indicator definitions follow standard formulas and TradingView's documentation on VWAP, volume profile, repainting and non-standard charts; ChartsPod's indicator reference was checked on 17 October 2026. Examples use illustrative numbers.

  1. ChartsPod indicator reference — indicator calculations.

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