Bollinger Bands Breakout Strategy is the strategy version of Bollinger Bands Filter study version, which can be found under my scripts page. The strategy goes long when price closes above the upper band and goes short signal when price closes below the lower band.
Bollinger Bands is a classic indicator that uses a simple moving average of 20 periods, along with plots of upper and lower bands that are 2 standard deviations away from the basis line. These bands help visualize price volatility and trend based on where the price is, in relation to the bands.
The strategy doesn't take into account any other parameters such as Volume / RSI / Fundamentals etc, so user must use discretion based on confirmations from another indicator or based on fundamentals. The strategy results are based on purely long and short trades and doesn't take into account any user defined targets or stop losses.
The strategy works great when the price closes above/below upper/lower bands with continuation on next bar. It is definitely useful to have this strategy or the Bollinger Bands filter along with other indicators to get early glimpse of breach/fail of bands on candle close during BB squeeze or based on volatility .
This can be used on Heikin Ashi candles for spotting trends, but HA candles are not recommended for trade entries as they don't reflect true price of the asset.
The strategy settings default is 55 SMA and 1 standard deviation for Bollinger Bands filter, but these can be changed from settings.
It is definitely worth reading the 22 rules of Bollinger Bands written by John Bollinger if interested in trading Bollinger Bands successfully.
Notas de Lançamento
⋅
Code updated
Notas de Lançamento
⋅
Code updated to include close longs and shorts.
Notas de Lançamento
⋅
Code updated - Raw Buy/Sell Strategy results based on 100% equity used with no SL/TP taken into account - commission not included. Users to test extensively before trading the strategy.
Why do you compare bar since long or short?
```
short = src<lower// and rsi(close,14)<40
long = src>upper// and rsi(close,14)>60
L1 = barssince(long)
S1 = barssince(short)
longSignal = L1<S1 and not (L1<S1)[1]
shortSignal = S1<L1 and not (S1<L1)[1]
```
Isn't `src<lower` or `src>upper` enough?
TradeChartist
⋅
@Le28, It just is the logic - Bars since the bear breakout must be less than bars since the bull breakout to detect the recent bear breakout and viceversa.
Le28
⋅
@TradeChartist, What's the meaning of `not (L1<S1)[1]`, L1 and S1 are number, `L1 < S1` is bool, why can you take [1] of a bool value?
TradeChartist
⋅
@Le28, PM me and I will share some examples when I get time. Also just use them with and without the not (L1<S1) to see effects on chart. All the best.
b36664984
⋅
@Le28, please sir convert strategy to study in this scropt i am facing alert condition problem, please help
@Daedalus_, MT4/MT5 not my forte. I'm just a self taught Pine coder.
mikesaif
⋅
I'm looking for an alert that will notify me when a candle finishes outside the BB but at least 50% of the candle close is outside. Is there an alert, indicator that will do that? Thanks.
TradeChartist
⋅
@mikesaif, Do you mean 50% of the candle body is outside the bands when it closes?
```
short = src<lower// and rsi(close,14)<40
long = src>upper// and rsi(close,14)>60
L1 = barssince(long)
S1 = barssince(short)
longSignal = L1<S1 and not (L1<S1)[1]
shortSignal = S1<L1 and not (S1<L1)[1]
```
Isn't `src<lower` or `src>upper` enough?