Bollinger Band Reversal Entries with Band-Touch Exits

Summary

This system uses Bollinger Bands to generate countertrend entries and dynamic exits. It opens a long when the close crosses above the lower band and a short when the close crosses below the upper band. A long exits if the candle high reaches the upper band; a short exits if the candle low reaches the lower band. The described defaults use a 10-period band and a two-standard-deviation multiplier, with position size expressed as a percentage of equity.

The document frames the bands as volatility-adaptive boundaries and notes risks from false signals in sideways markets, missed moves during strong trends, and parameter sensitivity. It suggests adding trend filters, refining exits, and varying settings with volatility. Published backtest settings identify daily ETH trading over roughly one year, but the supplied material gives no performance statistics or detailed transaction assumptions. The stated rules therefore describe a testable strategy, not evidence of an edge; intrabar band touches, costs, and position reversals may affect actual results.

Key ideas

• A close crossing above the lower Bollinger Band triggers a long entry, while a close crossing below the upper band triggers a short.
• Longs exit when the candle high reaches the upper band, and shorts exit when the low reaches the lower band.
• The example uses a 10-period band and a two-standard-deviation multiplier.
• The strategy can produce false signals in choppy markets and may underperform during strong trends.
• The published settings describe a daily ETH backtest, but no performance results are supplied.

Tags

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