This approach fades price extremes beyond the Bollinger Bands using the Percent B indicator. Moves above the upper band or below the lower band suggest overextension.
When percent B is less than zero or greater than one, the system bets on a return to the middle of the band. An exit threshold closes trades once momentum normalizes.
Stops are placed at a fixed percentage from entry.
Entry Criteria: Percent B outside the 0–1 range.
Long/Short: Both directions.
Exit Criteria: Percent B crosses ExitValue or stop.
Stops: Yes.
Default Values:
BollingerPeriod = 20
BollingerDeviation = 2.0m
ExitValue = 0.5m
StopLossPercent = 2.0m
CandleType = TimeSpan.FromMinutes(5)
[*]Filters:
Category: Mean Reversion
Direction: Both
Indicators: Bollinger Bands
Stops: Yes
Complexity: Basic
Timeframe: Intraday
Seasonality: No
Neural Networks: No
Divergence: No
Risk Level: Medium