A High and Low Bollinger Band System for Countertrend Trading

Summary

This system adapts the Bollinger Band idea by calculating an exponential average and standard deviation from highs for an upper threshold, and from lows for a lower threshold. When price moves above the high-based threshold, it opens a short position; when price falls below the low-based threshold, it opens a long position. The document presents this as a countertrend approach rather than a trend-following system, with separate lookback periods for the high and low calculations.

Those two periods can be optimized for different stocks, indices, or foreign-exchange markets, but the source gives no parameter values, backtest results, risk controls, or execution assumptions. It therefore describes a signal concept rather than evidence of profitability. A reader would need to test the rules across instruments and market conditions, account for costs and position management, and guard against overfitting during optimization. The remainder of the source is a privacy notice unrelated to the trading method.

Key ideas

• The upper threshold uses an exponential average and standard deviation calculated from highs.
• The lower threshold uses an exponential average and standard deviation calculated from lows.
• Crossing above the upper threshold triggers a short, while crossing below the lower threshold triggers a long.
• The source characterizes the rules as countertrend and allows separate high and low lookback periods.
• No testing evidence or risk-management details are provided.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.