Bollinger Band and RSI Entries with Fixed Stops and Risk-Reward Targets

Summary

This strategy combines Bollinger Bands with RSI thresholds to select entries. It goes long when the close is below the lower band and RSI is below its oversold threshold, and short when the close is above the upper band and RSI is above its overbought threshold. It allows only one open position at a time. Stop and target prices are set as percentages from the signal close, with the target distance scaled by a configurable reward-to-risk ratio.

Position quantity is calculated from a fixed dollar risk allowance and the stop distance, aiming to size trades around that risk amount. The script’s title claims a two-to-one setup and four-hour profitability, but the supplied material contains no strategy report or performance figures to verify either claim. It also does not discuss trading costs, slippage, or execution differences that could affect realized risk and returns. The rules describe a testable system, not evidence that the system is profitable.

Key ideas

• Long entries require a close below the lower Bollinger Band and an oversold RSI reading.
• Short entries require a close above the upper band and an overbought RSI reading.
• Stops and profit targets are set at percentage distances from the signal close.
• Position quantity is based on a fixed dollar risk allowance divided by stop distance.
• The title makes a profitability claim, but no supporting test results are included.

Tags

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