Bollinger Bands Breakout Strategy

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.
Release Notes: Code updated
Release Notes: Code updated to include close longs and shorts.
Release Notes: 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.
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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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)
shortSignal = S1<L1 and not (S1<L1)
Isn't `src<lower` or `src>upper` enough?
+2 Reply
@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
@TradeChartist, What's the meaning of `not (L1<S1)`, L1 and S1 are number, `L1 < S1` is bool, why can you take of a bool value?
+1 Reply
@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.
Great script! Seems to work best on ETHUSDT 2Hr time frame from what I can tell
+1 Reply
@TheAkxis, Thank you. It is always a good idea to trade 1 standard deviation breakouts on a reasonably longer lookback length of at least 34.
BlockWar TradeChartist

This is very good work my only question is what would be the settings for a 1min chart BTC/USDT
+1 Reply
The one of the good scripts. Simple yet powerful. Thanks
+1 Reply
@Aagtun, Thank you. Best wishes.
awesome one. i like ichi n bollinger. thanks lot. gonna use this.
+1 Reply
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