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.
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.
- 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