Buying Dips With Bollinger
Buying the dip with Bollinger Bands could be a profitable strategy! This edge trades the SPY that tracks the S&P 500, by combining Bollinger Bands with some more filters.
As can be seen in the infobox above, this edge trades the S&P 500 through the SPY. However, it should work well on other securities that track the same index as well.
With an impressive 86% winning rate and a profit factor of more than 2.5, this edge is a good start on a trading strategy!
Also, the fact that the backtest is carried out on nearly 20 years of data , is an indication that the edge is persistent throughout time, and might also perform well into the future!
The edge is composed of:
- A Tweaked Bollinger Band Filter
- A Second Indicator applied Twice With Different Approaches
- A Market Regime Filter
- An Indicator-Based Exit