Bollinger Stochastic Strategy

Bollinger Stochastic pairs Bollinger Bands with the stochastic oscillator to identify overextended moves. Price touching the outer band while the oscillator is in an extreme zone suggests a possible snap back.

Testing indicates an average annual return of about 133%. It performs best in the crypto market.

The system fades those extremes, going long when price hits the lower band with stochastic oversold, and shorting the upper band with stochastic overbought.

A percent-based stop limits risk if the mean reversion fails to occur.

Details

• Entry Criteria: indicator signal
• Long/Short: Both
• Exit Criteria: stop-loss or opposite signal
• Stops: Yes, percent based
• Default Values:
  • CandleType = 15 minute
  • StopLoss = 2%
• Filters:
  • Category: Mean reversion
  • Direction: Both
  • Indicators: Bollinger Bands, Stochastic
  • Stops: Yes
  • Complexity: Intermediate
  • Timeframe: Intraday
  • Seasonality: No
  • Neural networks: No
  • Divergence: No
  • Risk level: Medium