Bollinger Bands do not predict direction at all, and that single fact surprises more traders than it should given how often the bands get used as a buy-the-bottom, sell-the-top tool. What they actually measure is volatility: the bands are a moving average with two lines plotted a set number of standard deviations above and below it, and their entire job is showing you how wide or narrow price's recent behavior has been, not where it is headed next.
The three states worth naming
A squeeze is bands pulled tight together, standard deviation compressed, price coiling in a narrow range: EURUSD trading in a 15-pip band for two hours is a squeeze, and it usually resolves with an expansion, though not with any reliable clue about which direction. An expansion is the bands pushing apart quickly as a genuine move gets underway, and it typically follows a squeeze once real volume or a news catalyst arrives. A walk is price hugging one band and riding along it for several candles in a strong trend, which looks alarming to anyone expecting an instant reversal but is actually one of the more reliable signs a trend has real conviction behind it.
Why touching a band is not a signal
The most common misuse is treating a touch of the upper band as automatically overbought and the lower band as automatically oversold, the same trap RSI sets. In a squeeze or an ordinary range, that read has some merit: gold oscillating between 2,395 and 2,415 for a session will tag the upper band near 2,415 and the lower band near 2,395 repeatedly, and fading those touches works reasonably well precisely because the market is not trending. In a genuine trend, the same touch means something close to the opposite: Nasdaq walking the upper band from 19,150 to 19,340 across a trend day punishes every trader who shorted the first touch, then the second, then the third, because the band walk was telling them the trend was strong, not that price was overextended.
Trading the squeeze honestly
A squeeze is a genuine setup, but only for the breakout itself, never for guessing the direction in advance. The realistic approach: mark the squeeze, wait for a real candle close beyond either band with some range behind it, and enter in that direction rather than anticipating which way the coil will release. On EURUSD after a two-hour squeeze between 1.0838 and 1.0853, a 5-minute candle closing at 1.0861 with a wider-than-average range is the actual trigger, not the squeeze itself, which only told you a move was coming, not where.
Classify the state before you trade it
The practical use of Bollinger Bands is classification before tactics: check whether the bands are squeezed, expanding or walking before deciding whether fading extremes or trading breakouts is even the right game today. Fading band touches during a walk loses money reliably; waiting for a breakout during a tight range that never expands wastes an entire session. The bands answer which regime you are in. The trade itself still needs its own trigger and its own risk plan built on top of that read.