Bollinger band re-entry
A mean-reversion trade on 15-minute NIFTY futures. It waits for a bar to close outside the 20-period Bollinger Bands and then fades the move on the first close back inside, aiming for the middle band. The idea is that a stretch beyond two standard deviations that cannot hold is likely to drift back toward the average.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
This is the mirror image of the breakout strategies in this test. Choppy wide-range days that closed mid-range made ₹1,51,829 over 68 trades with a 63% win rate, and quiet sessions added ₹56,945 over 106, because a stretch outside the band usually snapped back to the middle. Trend days that closed near the high or low lost ₹1,77,032 over 85 trades: the price walked along one band, each close back inside was faded, and the trend resumed into the 0.5% stop or the 15:15 exit. NIFTY weekly expiry days lost ₹62,579 over 58 trades.
About this strategy
- Build 15-minute bars of the near-month NIFTY future and compute a 20-bar average with bands two standard deviations above and below; bands restart on each new contract.
- Buy when the previous bar closed at or below the lower band and the current bar closes back above it.
- Sell when the previous bar closed at or above the upper band and the current bar closes back below it.
- Signal bars must close between 09:30 and 14:45; the trade fills at the next tick and only one trade is open at a time.
- The target is the middle band's value at the signal bar, fixed for the trade.
- The stop is 0.5% from the fill price, and anything open at 15:15 is closed.
Why traders use it
Bollinger Bands widen and narrow with volatility, so a close outside them marks an unusual stretch for current conditions. Waiting for the close back inside, rather than fading the first touch, avoids standing in front of a move that is still accelerating. The middle band gives a natural, nearby target, and the setup is simple to see on any chart, which keeps it popular with intraday traders.
The year in plain words
In intraday mode on NIFTY futures from 1 Oct 2025 to 30 Sep 2026, the strategy made 260 trades and won 51%, for ₹34,732 before costs and a profit factor of just 1.06. Average win and average loss were almost equal at about ₹4,600. Only 85 trades reached the middle band; 133 were closed at 15:15 and 42 hit the 0.5% stop. Costs on 260 round trips reversed the result to a ₹45,575 loss after ₹20 per order and bid-ask slippage. Monthly swings were large: May made ₹53,114 while March lost ₹61,881.
What the settings do
Risks
- The before-costs edge is thin, so ordinary brokerage and spread turned it into a loss.
- Fading moves on trend days means repeatedly trading against momentum.
- Many trades end at the time exit rather than the target, so results depend on late-session drift.
- Futures carry full exposure, and the 0.5% stop can fill worse during fast moves.
Who it suits
Intraday futures traders who prefer counter-trend setups and can follow a fixed rule without overriding it on strong days. With costs included the default version lost money, so it fits those who will study the settings rather than trade it as is.
Questions traders ask
What is the Bollinger Band re-entry strategy?
It trades the moment price returns inside a Bollinger Band after closing outside it. A close back above the lower band is a buy, a close back below the upper band is a sell, and the target is the middle band, the moving average.
Is the Bollinger Band mean reversion strategy profitable?
Before costs it made ₹34,732 on NIFTY futures from 1 Oct 2025 to 30 Sep 2026, but after ₹20 per order and bid-ask slippage it lost ₹45,575. Statutory charges would add to the loss. Past results do not guarantee future ones.
Why wait for the close back inside instead of fading the first touch?
A price outside the band can keep going on a trending day. Waiting for a close back inside shows the stretch has started to fail, which avoids some of the worst fades, though it gives up part of the reversal move.
Can it be traded on daily charts?
Yes. Daily mode uses daily bars of the rolled future, enters at the next session's open after a signal, uses a 2% stop and holds overnight until the target, stop, or the monthly futures expiry.