Bollinger Breakouts Confirmed by Three Supertrend Signals
Summary
This trend-following system combines Bollinger Bands with three Supertrend lines. It uses 20-period Bollinger Bands with a standard deviation multiplier of 2, plus three Supertrend calculations using an ATR length of 10 and factors of 3, 4, and 5. A long entry requires a close above the upper band while all three Supertrend directions are bullish; a short entry requires a close below the lower band with all three bearish. The position closes if any Supertrend changes against it.
The document argues that requiring agreement across indicators can filter some false signals, while also acknowledging delayed entries, whipsaws in sideways markets, slippage, and parameter sensitivity. It suggests volume or volatility filters and dynamic or trailing stops. Although the source includes a date-range setting, the strategy logic shown leaves that filter inactive, and the document reports no backtest results. The method is therefore a rule set with stated risks, not evidence that the combination improves returns.
Key ideas
- Long entries require an upper Bollinger Band breakout and bullish direction from all three Supertrend lines.
- Short entries require a lower-band break and bearish direction from all three Supertrend lines.
- A change in direction from any Supertrend line closes the corresponding position.
- Multiple confirmations can delay entries and do not eliminate false signals or slippage.
- The document proposes additional filters and stop methods but reports no performance results.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.