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Bollinger-Stoch Reversal Strategy is a price action-based reversal trading strategy that combines Bollinger Bands, a custom arrow alert (Reversal Alert), and the Stochastic Oscillator. It aims to detect potential turning points in the market after overextended moves, using price volatility and momentum confirmation.

This strategy is perfect for sideways markets. 

Setup

• Time Frame: 15-minute or higher (M15, M30, H1, etc.)

• Currency Pairs: Any (preferably with decent volatility)

• Platform: MetaTrader 4 (MT4)

• Indicators Used:

  1. Bollinger Bands (Period: 15, Deviation: 3)

  2. Reversal Alert Indicator (custom arrow signals based on Bollinger + price action,default setting )

  3. Stochastic Oscillator (5, 3, 3)

Trading Rules

Buy Conditions

1. A green arrow appears below the candle (Reversal Alert).

2. The candle touches or pierces the lower Bollinger Band.

3. Stochastic Oscillator is below 20 and turning upward (or crossing).

Optional Re-entry:
If the first arrow entry fails (price continues lower), you may re-enter the trade when the %K line crosses above the %D line in the Stochastic Oscillator.

Sell Conditions

1. A red arrow appears above the candle (Reversal Alert).

2. The candle touches or pierces the upper Bollinger Band.

3. Stochastic Oscillator is above 80 and turning downward (or crossing).

Optional Re-entry:
If the first arrow entry fails (price continues higher), re-enter when the %K crosses below %D in the Stochastic.

Exit Rules

• Take Profit: Aim for 1:1.5 or 1:2 risk-reward ratio.

  Stop Loss: Set below (for buy) or above (for sell) the arrow candle’s wick or use ATR(14) for dynamic SL.

  Manual Exit Option: Exit the trade when the Stochastic Oscillator enters the opposite overbought/oversold region or price hits the opposite Bollinger Band.

Conclusion

The Bollinger-Stoch Reversal Strategy is ideal for spotting reversals at volatility extremes, confirmed by momentum. It provides visual arrow-based alerts and clear re-entry criteria using the Stochastic Oscillator. Suitable for traders who prefer fast-paced markets and frequent setups, especially on M15 to H1 timeframes.

Submit by JanusTrader 30/04/2012

Time Frame 4 H

Currency pairs:any.

Indicators:

Bollinger Bands(20, 2)

SVE Bollinger Bands (set default)

This strategy is simple

If you open an H4 chart and you insert the Bollinger Bands(20) indicator, if you observe the chart you will see that the bands are simply a Resistance and Support. The Upper band is a Resistance and the Lower Band is a Support. If you pay attention to the chart you will see that most of time the price hit the upper band then it retraces back to Lower Band, so how I trade is very easy, I wait till the price touches let’s say the upper band and closes under it (not above it) and wait till the candle is formed, when it finishes and the next candle opens under the previous Upper band then I enter a

Short trade with target = middle band.

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