This strategy is an enhanced trading system based on the Bollinger Bands indicator, optimizing the traditional Bollinger Bands strategy by using double standard deviation bands. The strategy utilizes price interactions with different standard deviation levels to generate trading signals, aiming to capture both trend and reversal opportunities in the market.
The core of this strategy lies in using two different levels of Bollinger Bands:
This dual-layer Bollinger Band design allows the strategy to operate flexibly under different market conditions, capturing strong trends while also identifying potential reversal points.
The Enhanced Dynamic Bollinger Bands Trading Strategy is a flexible and powerful trading system that effectively balances trend-following and reversal trading needs through a dual-layer Bollinger Band structure. The strategy’s main advantages lie in its dynamic adaptability and clear visual feedback, making it a potent tool suitable for various market conditions. However, traders need to be aware of the risks of false breakouts and overtrading, and consider introducing additional filters and dynamic parameter adjustments to optimize strategy performance. Through continuous testing and optimization, this strategy has the potential to become a reliable trading system, providing traders with stable profit opportunities.
/*backtest start: 2024-05-28 00:00:00 end: 2024-06-27 00:00:00 period: 2h basePeriod: 15m exchanges: [{"eid":"Futures_Binance","currency":"BTC_USDT"}] */ //@version=5 // Bollinger Bands: Madrid : 14/SEP/2014 11:07 : 2.0 // This displays the traditional Bollinger Bands, the difference is // that the 1st and 2nd StdDev are outlined with two colors and two // different levels, one for each Standard Deviation strategy(shorttitle='MBB', title='Bollinger Bands', overlay=true) src = input(close) length = input.int(34, minval=1) mult = input.float(2.0, minval=0.001, maxval=50) basis = ta.sma(src, length) dev = ta.stdev(src, length) dev2 = mult * dev upper1 = basis + dev lower1 = basis - dev upper2 = basis + dev2 lower2 = basis - dev2 colorBasis = src >= basis ? color.blue : color.orange pBasis = plot(basis, linewidth=2, color=colorBasis) pUpper1 = plot(upper1, color=color.new(color.blue, 0), style=plot.style_circles) pUpper2 = plot(upper2, color=color.new(color.blue, 0)) pLower1 = plot(lower1, color=color.new(color.orange, 0), style=plot.style_circles) pLower2 = plot(lower2, color=color.new(color.orange, 0)) fill(pBasis, pUpper2, color=color.new(color.blue, 80)) fill(pUpper1, pUpper2, color=color.new(color.blue, 80)) fill(pBasis, pLower2, color=color.new(color.orange, 80)) fill(pLower1, pLower2, color=color.new(color.orange, 80)) if (close > upper2) strategy.entry("Long", strategy.long) if (close < lower2) strategy.entry("Short", strategy.short) if (close <= lower2) strategy.close("Long") if (close >= upper2) strategy.close("Short")