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Bollinger band reversion strategyvsBollinger squeeze breakout strategy

Bollinger band reversion strategy: Fade a 2-sigma stretch below the mean and exit when price tags the middle band. Β· Bollinger squeeze breakout strategy: Ride the volatility expansion when price breaks out of a tight Bollinger range.

Mean reversionLong only

Bollinger band reversion strategy

Fade a 2-sigma stretch below the mean and exit when price tags the middle band.

BreakoutLong only

Bollinger squeeze breakout strategy

Ride the volatility expansion when price breaks out of a tight Bollinger range.

Indicators

  • Bollinger Bands (period 20, Οƒ Γ— 2)βœ“ both
  • Bollinger Bands (period 20, Οƒ Γ— 2)βœ“ both

Timeframes

15m1h4h
15m1h4h

Bias

Long only

Long only

Market fit

Range-bound

Volatility expansion

Entry rules

  • Enter long when close is below the lower Bollinger band β€” a 2Οƒ stretch below the 20-bar mean.
  • Single position; 3-bar cooldown after exit.
  • Enter long when close crosses above the upper Bollinger band.
  • Single position at a time; 3-bar cooldown after exit.

Exit rules

  • Exit when close pushes back above the middle band.
  • Hard 3% stop-loss; 2% trailing stop locks in any reversion gain.
  • Close as soon as price slips back below the middle band (the 20-bar SMA).
  • Trailing 4% stop on the runner so a failed breakout dies cheaply.

Expected behavior

Smooth equity curve in low-volatility regimes with frequent small wins. Sharp drawdowns when a trend extends and price stays pinned below the lower band β€” the strategy expects mean reversion that may not arrive.

Lots of small chop with a handful of clean runs that come after periods of low realised volatility. Quiet markets feed the strategy with setups; the payoff is asymmetric β€” many small losses, few large wins.

Complexity

1 ind Β· 2 entry Β· 2 exitBalanced
1 ind Β· 2 entry Β· 2 exitBalanced

Which one is right for you?

Derived from the bias, timeframe and indicator profile of each strategy β€” not a back-test forecast.

When to pick Bollinger band reversion strategy

  • You expect range-bound β€” the thesis is "Fade a 2-sigma stretch below the mean and exit when price tags the middle band."
  • You want a long-only bot on 15m–4h candles with a balanced rule-set.
  • You're comfortable monitoring 1 indicator (Bollinger Bands (period 20, Οƒ Γ— 2)).

Fade a 2-sigma stretch below the mean and exit when price tags the middle band.

When to pick Bollinger squeeze breakout strategy

  • You expect volatility expansion β€” the thesis is "Ride the volatility expansion when price breaks out of a tight Bollinger range."
  • You want a long-only bot on 15m–4h candles with a balanced rule-set.
  • You're comfortable monitoring 1 indicator (Bollinger Bands (period 20, Οƒ Γ— 2)).

Ride the volatility expansion when price breaks out of a tight Bollinger range.

Bollinger band reversion strategy

Fade a 2-sigma stretch below the mean and exit when price tags the middle band.

Try Bollinger band reversion strategy in dashboard β†’Read full breakdown β†’

Bollinger squeeze breakout strategy

Ride the volatility expansion when price breaks out of a tight Bollinger range.

Try Bollinger squeeze breakout strategy in dashboard β†’Read full breakdown β†’

Related comparisons

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