Bollinger Bands are a popular technical volatility indicator. They place upper and lower bounds around the trading ranges of a security's price action. Since the heart of any applied Bollinger Bands is a simple moving average, these indicators make natural candidates for a moving average crossover strategy.

Moving average crossover strategies apply two separate moving averages of varying lengths for indications of changing momentum whenever one of the averages crosses over or under the other. For example, your Bollinger Bands might be centered around a 20-day simple moving average and you could also apply another 200-day simple moving average to the same price chart. Whenever the Bollinger Band moving average line crosses above the long-term average, this could be a signal to enter a long position in anticipation of bullish momentum. When the Bollinger Band moving average line crosses underneath the 200-day line, you can enter a short position.

The Bollinger Bands do not have to form the short-term moving average. You could just as easily apply a 10-day simple moving average and use its movements relative to the Bollinger Bands' 20-day moving average center line to signal your trades.

Traders who are concerned about possible lag in their indicators could apply an exponential moving average instead of a simple moving average in conjunction with the Bollinger Bands. Since this is more of a factor with longer-term moving averages, an exponential moving average of 50 days or more is common.

The trading signals are the same regardless of the type or length of moving average that you combine with your Bollinger Bands. Bullish signals occur when the shorter moving average crosses above the longer moving average, and bearish signals are sent by the shorter moving average crossing below the longer moving average.