Senthaamizh

Bollinger Band Breakout

It is a long only strategy.

1. Buy when price breaks out of the upper band.
2. Exit has two options. Option 1 allows you to exit using lower band. Option 2 allows you to exit using moving average.
3. Option 1 preferred over option 2 if the instrument is highly volatile.
4. Slippage and commissions are not considered in the return calculation.
Release Notes: Modified the position sizing. Now it is based on the available capital.
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

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Comments

Thank you for this strategy, looks very good.

Just of curiosity : why buy when breaks the upper band, shouldn't it buy when it breaks the lower one ? I'm trying to understand BB, your answer would be very appreciated
+10 Reply
interesno drutrading88
@drutrading88, i tested.. with "upper" it's better, than with lower :) i'm surprised :)
+4 Reply
oneman2amazing drutrading88
@drutrading88, The bands do no suggest buy or sell signals themselves and price can stay in the upper or lower for a while.
Reply
Senthaamizh drutrading88
@drutrading88, Yes, you are right. It was built to find the reversing points but it works only in sideways market and not when the instrument is trending. In the long run, Index are always trending so I am buying the breakout of upper band.
Reply
Anyone knows how to put a timeframe into this script? For example, back test from 01/01/2015 to current date.
I have tried a numberous of different addons but none of it worked.

Thanks in advance!!
+4 Reply
Just an idea like that, if the buy signal would happen when price breaks up the upper band AND when the BB width is at it's 6 months low, you would get a strategy that looks pretty much like the one described in the book Bollinger on Bollinger Bands. Actually I wish I could find such strategy.
+1 Reply
Senthaamizh Madcaptains
@Madcaptains, it will be helpful if you can mention how the author calculates the BB width.
Reply
There is a huge difference between standard candles and heikin ashi candles. Is this normal? For example in Turkish stock market, THYAO (turkish airlines) at 1 day period, it gets %1465 profit in 15 years. and the same stock at same period with heikin ashi candles, it gets %38340 profit in 15 years.
Reply
@PipKing, the Heikin Ashi candles are calculated differently when compared to candlestick so there will be difference. The Heikin Ashi in general reduces noise so because of that reason many false signals might not have generated.
Reply
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