Bollinger Band %B Trade

Entry Logic

• Exact Entry Trigger: Enter long when %B crosses above 0.8. Enter short when %B crosses below 0.2.
• Confirmation: A strong momentum candle in the direction of the trade.
• Timeframe: 5-minute, 15-minute.
• Market Condition: Trending.

Exit Logic

• Profit Targets: Target %B levels of 1.0 for longs and 0.0 for shorts.
• Opposite Signal: Exit on a cross of the 0.5 level against the trade.

Stop Loss Structure

• Hard Stop: Place stop at the 20-period SMA (middle band).

Risk Management Framework

• Risk Per Trade: 0.75% of account capital.
• R:R Requirement: Minimum 1.5:1.

Position Sizing Model

• Sizing Approach: Fixed fractional.

Trade Filtering

• Market Conditions to Avoid: Ranging markets.

Context Framework

• Trend Direction: Trade in the direction of the higher timeframe trend.

Trade Management Rules

• Breakeven: Move stop to breakeven after a 1R move.

Time Rules

• Optimal Window: During active trending periods.

Setup Classification

• A+ Setup: The %B signal occurs as a breakout from a consolidation pattern.

Market Selection Criteria

• Instruments: Any liquid, trending instrument.

Statistical Edge Metrics

• Win Rate: 50-60%.
• Profit Factor: 1.6.
• Expectancy: 0.3R.

Failure Conditions

• Strategy Fails: In choppy, non-trending markets.

Psychological Rules

• Discipline: Focus on signals that align with the broader market context.

Advanced Components

• Filters: Use a trend-confirming indicator like a long-term moving average.

Location

• Strongest: As a confirmation of a trend continuation.