Bollinger Band Touches with Harami Reversal Signals
Summary
This strategy looks for a two-candle Harami reversal after the first candle reaches an outer Bollinger Band. A bullish setup requires the first candle to touch or cross the lower band and close down, followed by a current candle whose body sits within the previous candle’s body. The bearish setup mirrors those conditions at the upper band. It then enters long or short and specifies fixed take-profit and stop-loss exits.
The script sets the band length and multiplier as adjustable inputs, with defaults of 20 and 2. It also plots the bands, marks signals, and provides alert conditions. The document offers rules and implementation details, but no performance results or evidence that the approach is profitable. Although the description refers to Heikin Ashi prices, the code directly assigns chart OHLC values rather than calculating Heikin Ashi candles. The stated profit and loss amounts may also depend on instrument and platform settings.
Key ideas
- A bullish reversal requires a lower-band touch, a bearish prior candle, and a current body contained within the prior body.
- A bearish reversal applies the mirrored conditions after an upper-band touch.
- The strategy uses Bollinger Bands calculated from a simple moving average and standard deviation.
- Entries are paired with fixed take-profit and stop-loss exits.
- The document provides no backtest evidence, and its Heikin Ashi description does not match the price assignments in the code.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.