A Bollinger Band squeeze occurs when the bands contract to their narrowest point, indicating low volatility and potential for a breakout. Trade it by waiting for price to break above the upper band or below the lower band with volume confirmation. Use other indicators to determine breakout direction and always set proper stop losses.

For mean reversion, buy when price touches the lower band in an uptrend (oversold bounce) and sell when price reaches the upper band in a downtrend (overbought rejection). Always trade in the direction of the higher timeframe trend and use volume confirmation. Set stop losses beyond the bands and targets at the middle band or opposite band.

Bollinger Bands are unique because they adapt to market volatility, expanding during high volatility and contracting during low volatility. Unlike fixed percentage bands, they use standard deviation to create dynamic support and resistance levels. They combine trend analysis (middle band) with volatility analysis (band width) in a single indicator.

Avoid false signals by using volume confirmation (1.5x average volume), waiting for retest and hold above/below bands, combining with other indicators like RSI or MACD, and trading in the direction of the higher timeframe trend. False signals are common during low liquidity periods, so focus on active trading hours.

The best timeframe depends on your trading style: day traders use 5-15 minute charts, swing traders use 1-4 hour charts, and position traders use daily charts. Use multiple timeframes - higher timeframe for trend direction and lower timeframe for precise entry points. For Indian markets, daily charts work well for swing trading, while 15-minute charts are good for day trading.