Bollinger Band Breakouts Traded Against the Move

Summary

The strategy uses the iBands indicator to define an upper and lower price channel. It takes a contrarian position when price crosses beyond a channel boundary: a break above the upper band triggers a sell, while a break below the lower band triggers a buy. In effect, the rule treats excursions outside the bands as potential reversals rather than signals to follow the breakout. The page refers to trading results for 2016–2017, but supplies no figures or methodological details in the text.

The description leaves key implementation choices unspecified, including band settings, entry timing, exit rules, stop placement, position sizing, and transaction costs. It gives no comparison with a trend-following interpretation of band breaks and no evidence that the displayed historical period generalizes. Because a strong trend can keep price outside a band, this contrarian entry rule may face sustained adverse movement. The described entry signal alone is not a complete trading plan, and its results cannot be evaluated from the information provided.

Key ideas

• The method uses iBands to identify upper and lower price-channel boundaries.
• A move above the upper band triggers a sell, while a move below the lower band triggers a buy.
• The entries are contrarian and assume that channel excursions may reverse.
• The page references results from 2016–2017 but gives no performance figures or test details.
• Exit rules, risk controls, indicator settings, and trading costs are not specified.

Tags

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