How It Trades
- Each bar, compute the 20-bar simple moving average of the close and its Bollinger Bands two standard deviations above and below.
- Buy when the close drops below the lower band: an unusually stretched move to the downside.
- Sell as soon as the close recovers above the middle band (the 20-bar average itself): taking the quicker, more reliable half of the bounce instead of waiting for the far band.
Example Strategy
Pine Script
Paste it into TradingView’s Pine Editor to run these rules on any chart.
//@version=6
// Bollinger Mean Reversion — sort.finance. Fills at the signal bar's close, 0.02% fee a side,
// whole account per trade, as the backtest. History and indicator warm-up
// differ from the site's, so expect close to the same trades, not identical.
strategy("Bollinger Mean Reversion", overlay=true,
initial_capital=100, default_qty_type=strategy.percent_of_equity,
default_qty_value=100, commission_type=strategy.commission.percent,
commission_value=0.02, process_orders_on_close=true, pyramiding=0)
// The bar the current position opened on, and the bar the last one closed on.
var int entryBar = na
var int exitBar = -1
// ── Signals ──────────────────────────────────────────────────────────────
[middle, upper, lower] = ta.bb(close, 20, 2)
enterNow = close[1] >= lower[1] and close < lower
exitNow = close[1] <= middle[1] and close > middle
// ── Orders ───────────────────────────────────────────────────────────────
// Open on the first bar the entry holds while flat; close on the first
// later bar the exit holds; never reopen on the bar a position closed.
inTrade = strategy.position_size != 0
if inTrade and bar_index > entryBar and exitNow
strategy.close("Long")
exitBar := bar_index
else if not inTrade and bar_index > exitBar and enterNow
strategy.entry("Long", strategy.long)
entryBar := bar_index
// ── Drawing ──────────────────────────────────────────────────────────────
plot(upper, "Upper Band", color=#8a92a0)
plot(middle, "Middle Band", color=#4d8dff)
plot(lower, "Lower Band", color=#8a92a0)