A BTC Study on the Bollinger Bands

In this technical analysis I will walk you through the methodology that I applied to verify a hypothesis that I've been forming while looking at BTC recently.

This is a slightly different analysis than the one I usually publish, I'd be very interested to hear your feedback. I want to experiment a bit with different forms of ideas that I publish here on the platform.

I am taking the bollinger bands over the last weeks and check every time the price comes above or below it. I want to see if it has predictive value over the next movement.

I hope that together with some of you I can extend this theory to make it more accurate. Perhaps there are ways that I can make it more accurate by discovering connections that I hadn't seen yet.

So please feel free to drop me a comment below if you have more ideas!

So what about the strategy?
This will be a good lesson on risk-reward as you will see unfold that we can make a good profit with a near 50/50 win loss strategy.

So what would the strategy actually look like? The strategy would be as follows: You would wait for the price to break out of the Bollinger bands and immediately start a BTC trade.

Then, if it is above the upper band you would place a short. Conversely if it is below the lower band you would place a long.

The hard part is about determining where to place your stop loss and where to take profit. I played with a few numbers, but it seems that if you take a profit of 3% and place a stop loss at a 2% risk you would get a very interesting results.

And what about the results?
There are:
- 32 breakouts in total
- 17 of which are positive
- 15 of which are negative
- 53% win-loss (17/32) total

To keep things simple and not work with compound interest now, this gives us a total of:
- 17*3 percent points profit,
- 15*2 percent points loss
- This is a net net 21% percent points profit

I'm super curious to hear your thoughts on this one. A new format where we discuss a trading strategy. Also what do you think of the strategy itself or the methodology I apply here to calculate how successful it is?


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Disclaimer!
This post does not provide financial advice. It is for educational purposes only!