Bollinger Bands 2-SD Reversion: 10-Year Backtest Across Market Regimes [2026]
Date Published
1. The Geometry of Bollinger Bands
Standard Deviation Envelopes around a 20-Day Mean
Created by John Bollinger, Bollinger Bands adapt dynamically to market volatility by expanding during volatile periods and contracting during consolidations (the Bollinger Squeeze).
However, in runaway trends, price can hug the outer bands for dozens of consecutive bars, causing massive drawdowns for naive counter-trend traders.
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