Bollinger Band Reversals with a Moving Average Trend Filter

Summary

This strategy combines Bollinger Bands with a simple moving average to look for reversal entries filtered by trend direction. The stated long setup is a close crossing upward through the lower band while also crossing above the moving average. The exit condition is a close crossing downward through the upper band while crossing below the moving average. Bollinger Bands are calculated from a moving average and a multiple of price standard deviation; the additional average is intended to qualify signals by broader direction.

The document gives example settings and a short published Bitcoin futures backtest period, but no performance statistics. Its prose sometimes describes the rules as long and short operations, while the supplied rules only open a long position and close it. The method may produce whipsaws in sideways markets, and its effectiveness depends on band and moving-average settings. Stop losses and additional filters are suggested, but they are not part of the shown entry and exit rules.

Key ideas

• The entry requires upward crosses of both the lower Bollinger Band and the moving average.
• The exit requires downward crosses of both the upper band and the moving average.
• The moving average is intended to filter reversal signals by trend direction.
• The supplied rules describe long entries and exits, despite broader references to two-way trading.
• No performance results are reported, and sideways markets and parameter choices may impair results.

Tags

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