BB-MeanReversion Strategy

BB-MeanReversion is an elementary strategy concept using the Bollinger Bands indicator.

Strategy Logic: The point of market reversal can be detected when the current price steps out of the Bollinger Bands Upper/Lower Band. The offset of the Bands is calculated as a multiplier of the Standard Deviation from the Mean. The trade is closed when the price returns to its Mean (average) value. Based on the direction of the price movement out of the BB Bands, we can distinguish:

Buy Signal:  Price falls below the Lower Band (Close price of the last bar is below the Lower Band).

Sell Signal: Price rises above the Upper Band (Close price of the last bar is above the Upper Band).

Close Signal: Current price returns to its average value (BB Mean).

BB-MeanReversion Entry Signals

BB-MeanReversion Strategy Inputs:

  • UniqueStrategyNumber – Unique strategy identifier (Magic Number), each running strategy should have a different UniqueStrategyNumber.
  • BollingerBandsPeriod – Period settings for the Bollinger Bands indicator (number of intervals from which are the Mean and Standard Deviation calculated)
  • BollingerBandsDeviation – Standard Deviation multiplier for calculating the Upper/Lower Bands
  • OrderSizeLots – Fixed order Size in Lots
  • StopLossPoints – Stop Loss distance from the entry price in Points (0 = No SL is set)
  • TakeProfitPoints – Take Profit distance from the entry price in Points (0 = No TP is set)
  • TrailingStopPoints – Trailing Stop distance in Points. When the Stop Loss distance from the current price is higher, the Stop Loss is adjusted closer to fit the preset level (0 = No TS is set)

Point – Minimal change in the asset quotation (usually the last digit)

Pip = 10 Points (regarding FX pairs)

Get the MA-Crossover forex strategy:

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