Bollinger Band Harami Reversal Strategy with Fixed Exits

Summary

This strategy looks for a two-candle Harami pattern after the prior candle reaches an outer Bollinger Band. A bullish setup requires that the first candle touch or cross the lower band and close down, followed by a candle whose body fits within the first candle’s body. The bearish rules mirror this at the upper band, using an up-close first candle. The bands use a 20-bar simple moving average and a standard deviation multiplier of two by default.

A bullish signal opens a long position and a bearish signal opens a short; each has a fixed take-profit distance of 40 and stop distance of 20, as configured in the script. Signals, bands, and alert conditions are plotted. The document gives the rule set but no backtest results, market, chart interval, or evidence that the parameter choices generalize. Despite its variable names, the script assigns chart open, high, low, and close directly, so it does not itself calculate Heikin-Ashi prices. Performance and execution assumptions therefore need separate evaluation.

Key ideas

• The setup combines an outer Bollinger Band touch with a candle-body containment pattern.
• The prior candle’s direction determines whether a contained body signals a bullish or bearish reversal.
• Long and short entries use fixed take-profit and stop distances.
• The script does not provide performance evidence or specify a market and timeframe.
• Its price variables copy chart data rather than transform it into Heikin-Ashi candles.

Tags

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