Bollinger Divergence (Python)

Bollinger Divergence hunts for extremes where price pierces a band yet the opposite band begins to contract. This divergence between price momentum and volatility often precedes a snap back toward the middle of the range. A long signal appears when a candle closes beneath the lower band while the upper band narrows by at least a set percentage. For shorts the pattern is mirrored around the upper band. Positions target a quick move back to the middle Bollinger line with an optional fixed take‑profit. The setup performs best in range‑bound markets or after a volatility spike begins to fade. The CandlePercent parameter controls how much the opposite band must contract before a trade is allowed, helping avoid whipsaws during strong trends.

• Data: Price candles.

• Entry Criteria:

• Long: Close below lower band AND upper band contracts by CandlePercent.

• Short: Close above upper band AND lower band contracts by CandlePercent. [*]Exit Criteria:

• Return to middle band OR take profit percentage. []Stops: No hard stop; relies on take profit or manual exit. []Default Values:

• BBLength = 20

• BBMultiplier = 2.0

• CandlePercent = 30

• TakeProfit = 5 [*]Filters:

• Category: Mean reversion

• Direction: Long & Short

• Indicators: Bollinger Bands

• Complexity: Simple

• Risk level: Medium