Bollinger Band Walk Trade

Entry Logic

• Exact Entry Trigger: In a strong uptrend, enter long on a pullback to the 20-period SMA (middle band). The price should be consistently closing outside the upper band ("walking the band").
• Confirmation: A bullish candle closing off the middle band.
• Timeframe: 15-minute, 60-minute.
• Market Condition: Strong, established trend.

Exit Logic

• Profit Targets: Hold as long as the price continues to walk the band.
• Exit Signal: Exit on a candle close below the 20-period SMA.

Stop Loss Structure

• Hard Stop: Place stop 1.5 ATR below the 20-period SMA.

Risk Management Framework

• Risk Per Trade: 1% of account capital.

Position Sizing Model

• Sizing Approach: Fixed fractional.

Trade Filtering

• Market Conditions to Avoid: Ranging or weak trending markets.

Context Framework

• Trend Direction: Only trade in the direction of the band walk.

Trade Management Rules

• Add Size: Add to the position on successful retests of the middle band.

Time Rules

• Optimal Window: During the strongest part of the trend.

Setup Classification

• A+ Setup: The stock is a market leader with a strong catalyst.

Market Selection Criteria

• Instruments: High-momentum growth stocks.

Statistical Edge Metrics

• Win Rate: 65-75%.
• Profit Factor: 1.8.
• Expectancy: 0.5R.

Failure Conditions

• Strategy Fails: When the trend exhausts and mean reversion takes over.

Psychological Rules

• Discipline: Do not exit prematurely; trust the trend.

Advanced Components

• Filters: Use a high ADX reading (>30) to confirm trend strength.

Location

• Strongest: In the heart of a powerful, sustained trend.