Bollinger Band Breakouts Filtered by ADX
Summary
This strategy combines Bollinger Band crossings with an ADX threshold to generate long and short entries. It enters long when price crosses back above the lower band and short when price crosses back below the upper band, provided ADX is below the threshold. An optional setting closes all positions when ADX rises above that threshold; another optional setting enables swing-based stop and target levels derived from recent highs and lows, with ATR adjustments.
The document describes the signal logic and lists tunable indicator and risk parameters, including band length, standard deviation multiplier, ADX settings, and a swing lookback. Its published backtest configuration uses BTC/USDT futures at one-minute intervals over a short date range, but no performance results are supplied. The source logic also differs in details from the prose: the entries are crossings back inside the bands, and the swing exits are disabled by default. The approach may produce false signals, depends on parameter choices, and has no stated evidence of profitability.
Key ideas
- Long entries follow a cross back above the lower Bollinger Band when ADX is below its threshold.
- Short entries follow a cross back below the upper band under the same ADX condition.
- An optional ADX rule closes positions when the indicator rises above the threshold.
- Swing-based stop and target orders are optional and disabled in the listed defaults.
- The short BTC/USDT futures backtest setup reports no performance results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.