[KL] BOLL + MACD Strategy v2

The [KL] BOLL + MACD Strategy indicator is a mean-reversion trading tool that identifies potential long entry points by combining Bollinger Band price levels with MACD momentum shifts. It specifically filters for buying opportunities when the price interacts with the lower Bollinger Band and enters as the MACD suggests an upcoming bullish crossover.

Usage

The strategy is primarily designed for daily (1D) chart intervals to capture significant trend reversals. A long entry is triggered when two conditions are met:

1. Price Touch: The price must have recently touched or approached the lower Bollinger Band area, indicating an oversold condition relative to the mean.
2. Momentum Shift: The MACD line must show signs of converging toward the signal line (a narrowing delta) while still below it, anticipating a bullish crossover.

Users can manage exits through several built-in mechanisms:

• Trailing Stop Loss: Uses an ATR-based buffer that moves upward as the trade remains profitable to protect gains.
• Risk-to-Reward Ratio: An optional fixed take-profit level based on a multiple of the initial risk.
• Bearish Pattern Recognition: An optional exit triggered by specific bearish price action, such as engulfing candles or downward gaps.

Details

The strategy calculates a standard Bollinger Band (20-period SMA, 2.0 Multiplier) to define the volatility range. For momentum, it employs a standard MACD (12, 26, 9) configuration. The core logic relies on "anticipating" a crossover; rather than waiting for the lines to cross, it looks for the gap between the MACD and the signal line to begin shrinking after a band touch. This approach aims to provide a more timely entry than traditional lagging crossover signals. The risk management uses Average True Range (ATR) over 26 periods to dynamically scale stop losses based on current market volatility.

Settings

Backtesting & Exits

• Backtest Start Time: Sets the start date for the strategy simulation.
• Define backtest end-time: Enables or disables a specific end date for the simulation.
• Backtest End Time: The date at which the strategy stops calculating trades (if enabled).
• Take profit when Risk:Reward met: When enabled, the strategy closes the position once the specified reward ratio is achieved.
• Risk:[Reward] for exit: The multiplier used to calculate the take-profit target relative to the initial ATR-based risk.
• Take profit when candle is bearish: When enabled, the strategy will exit if it detects a bearish engulfing pattern or a gap down.
• ATR multiplier for stop loss: Determines the distance of the trailing stop loss from the entry price based on market volatility.

FAQ

How do I use the [KL] BOLL + MACD Strategy?

The strategy is best applied to higher timeframes like the Daily chart. Look for the price to dip below the middle Bollinger Band toward the lower band, then monitor for the MACD momentum to turn upward for an automated entry signal.

What is the advantage of using a trailing stop with this strategy?

The ATR-based trailing stop allows the strategy to capture extended runs while protecting against sudden reversals, automatically locking in profits as the price moves in your favor.

Where can I access this script?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.