Bollinger Bands + EMA 9

The Bollinger Bands + EMA 9 indicator is a mean-reversion scalping tool designed to capture quick price corrections toward the 9-period Exponential Moving Average (EMA).

Usage

This tool is primarily utilized as a 1-minute scalping strategy. It looks for price deviations outside the Bollinger Band boundaries followed by a corrective candle.

• Long Signals: Occur when the previous candle closes below the lower Bollinger Band, followed by a bullish candle that closes above the lower band but below the 9 EMA. The target is set at the 9 EMA value, with the stop loss placed at the low of the signal setup.
• Short Signals: Occur when the previous candle closes above the upper Bollinger Band, followed by a bearish candle that closes below the upper band but above the 9 EMA. The target is set at the 9 EMA value, with the stop loss placed at the high of the signal setup.

Details

The script combines two classic volatility and trend components:

• Bollinger Bands (20, 2): Used to identify overextended price action. The script specifically monitors closes outside these bands to find exhaustion points.
• 9-Period EMA: Acts as the dynamic mean or "gravity" point for the price. In this strategy, the EMA serves as the primary take-profit level.

The strategy includes a built-in risk management module that allows users to define risk based on a percentage of equity or a fixed dollar amount, automatically calculating position sizes based on the distance between the entry and the stop loss.

Settings

Risk Management

• Max Risk (%): Defines the maximum amount of capital to risk per trade.
• Risk Type: Choose between a percentage of total equity (%) or a fixed monetary amount ($).

FAQ

How do I use the Bollinger Bands + EMA 9?

You can apply this tool to low-timeframe charts (like the 1m) to identify mean-reversion opportunities. Look for price candles closing outside the bands and then returning toward the EMA.

What are the ideal market conditions for this script?

This strategy is most effective in ranging or moderately trending markets where price frequently reverts to its short-term average. It may struggle in extremely high-momentum "parabolic" trends where price stays outside the bands for extended periods.

How can I access this tool?

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