Bollinger Lower Band Touch: how the strategy works
Bollinger Lower Band Touch is a volatility strategy in the SmartPaperDesk library. See exactly when it enters and exits, and when it tends to struggle.
Volatility Basic Free plan · हिन्दी में पढ़ें
What it does
It reads daily prices. It enters a position when all of the entry conditions below is true, and it leaves when its exit rule, its stop-loss or its time limit is reached.
Entry rule
All of these must be true on the same day:
- The close is below the lower Bollinger band (20 days, 2 standard deviations).
Exit rule
It has no exit signal of its own. It leaves on a stop-loss 8% below the entry, or after 30 days at most.
The idea behind it
Volatility rules use bands drawn a set number of standard deviations around an average, and act when price reaches or breaks through a band.
The bet it makes
It bets on what happens when price moves unusually far from its recent range.
When it tends to struggle
Price can ride along a band for weeks, so a touch is not a turn. Bands also widen and narrow with the market, so the same touch means different things in calm and wild periods.
Test it on paper
You can run this strategy on historical, delayed daily data with estimated charges on the free plan. No real money and no real orders are involved.
Questions people ask
Is Bollinger Lower Band Touch a buy signal?
No. It is a rule that describes a setup and has to be tested. A rule that fits one period can fail in another, so check it over a long period with costs included.
What does Bollinger Lower Band Touch exit on?
It has no exit signal of its own. It leaves on a stop-loss 8% below the entry, or after 30 days at most.
Learn more
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SmartPaperDesk is an educational paper-trading tool. Strategy pages describe a rule only; they show no results and give no advice.
For educational purposes only. This is not investment advice. Past performance does not guarantee future results.