Steven Primo Bollinger Band Strategy

The Steven Primo Bollinger Band indicator is a mean-reversion tool designed to identify reversal opportunities following extended price movements outside of the Bollinger Bands.

Usage

The strategy identifies potential trade setups based on price momentum and subsequent reversals. For a long entry, the script waits for a specific number of consecutive closes (defaulting to 5) above the upper Bollinger Band. Once this momentum condition is met, the tool looks for a short-term peak (Pivot High). An entry order is placed at this peak, with a stop loss set at the recent swing low and a target projected based on the risk-to-reward ratio.

For short entries, the process is inverted: the script looks for consecutive closes below the lower Bollinger Band followed by a Pivot Low. This approach is most effective in directional markets with low noise, where clear trends are established before reverting.

Details

This implementation utilizes a logarithmic version of the price source for Bollinger Band calculations to eliminate discrepancies often found in linear scales, particularly in high-volatility assets like cryptocurrencies. Unlike some traditional versions of this setup, the requirement for price to be above or below a Moving Average has been removed to allow for more timely entries, as price action typically resides beyond the mean during these setups anyway.

The script includes visual aids such as plot lines for the calculated target and stop loss levels once a trade is active. It also features an optional trailing stop, though users should evaluate its impact on performance as it may tighten exits prematurely in certain market conditions.

Settings

Bollinger settings

• Price source: The data point used for the logarithmic BB calculation (default: Close).
• Bollinger length: The lookback period for the Bollinger Band basis.
• Standard deviation: The multiplier for the bands; a lower value like 0.382 is used for tighter mean-reversion detection.

Setup settings

• Order direction: Choose between Long, Short, or Both directions for the strategy.
• Use trailing stop: Enables a trailing stop mechanism once an entry is filled.
• Consecutive closes for the setup: The number of bars required to close outside the bands to trigger the setup.
• Extension (%): Determines the profit target relative to the distance between the entry and stop loss. A minimum of 100% ensures a minimum 1:1 risk-to-reward ratio.

FAQ

How do I use the Steven Primo Bollinger Band indicator?

You can apply it to your chart and monitor for the consecutive closes outside the bands. The strategy will automatically plot entry, stop, and target levels when a setup occurs.

What markets does this work best on?

It is designed for directional markets with low noise, such as major crypto pairs (BTCUSD) or trending equities.

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.