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Bollinger Band mean reversion

Classic / reversal · Timeframe: H1 · Sessions: Asia / ranges

In trendless markets, closes outside the band tend to revert to the mean.

How it works

With a low ADX (no trend), a close outside the Bollinger band (2σ) followed by a close back inside suggests overextension. The natural target is the 20-period average.

Step-by-step rules

  1. ADX(14) < 20.
  2. A candle closes outside the band and the next closes back inside.
  3. Entry at the close; stop at the extreme + 0.2 ATR.
  4. Target: the 20-period average (at least 1R).

How Marketalyx tests it

Detector (H1): ADX < 20, re-entry into the bands; target the average (min. 1R).

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Educational content. No strategy guarantees profits and past performance does not guarantee future results.