StrategiesBollinger Bands Mean Reversion
🔄 Mean ReversionEasy
Bollinger Bands Mean Reversion
Exploits the return of price toward the middle band (SMA 20) of the Bollinger Bands after a touch of the outer band, in sideways or low-directionality markets.
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Typical R/R
1:1.5 — 1:2
Win Rate
55–62%
Timeframe
1H, 4H, Daily
Category
Mean Reversion
[ STRATEGY SCHEMA ]
[ MARKET LOGIC ]
Bollinger Bands represent 2 standard deviations from the moving average. When price touches the outer band without strong continuation momentum, it statistically tends to return toward the middle band (mean reversion).
PROS
Simple and objective
Great in sideways markets
CONS
Dangerous in strong trends
Requires ADX filter to avoid false signals
What are the setup conditions for Bollinger Bands Mean Reversion?
1
Sideways market or low ADX (< 20) on the higher timeframe2
Price touches or slightly exceeds the upper/lower band3
No volume increase confirming a real breakout4
Rejection candle (Pin Bar, Doji) on the touched bandWhich filters improve the quality of the signal?
Do not use if ADX indicates a strong trend (> 25): risk of buying/selling against a real breakout
Better in low-volatility sessions (Asia) on Forex
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