Gold Bollinger Band Strategy

Standard settings (20-period, 2 standard deviations) work well for gold on most timeframes. For faster trading (5-15 min charts), consider (10, 1.5). For swing trading (daily), (20, 2) or (21, 2) is recommended.

No! Fading band touches (mean reversion) only works in ranging markets. In strong trends, price 'walks' along bands and mean reversion fails. Always identify the market regime first.

A squeeze occurs when bands narrow significantly (low volatility). This often precedes a major breakout. The squeeze itself doesn't predict direction - you wait for price to break out of the bands to determine the trade direction.

Check the middle band slope - flat indicates ranging, steep slope indicates trending. Also observe if price is oscillating between bands (ranging) or walking along one band (trending).

For mean reversion: Wait for a reversal candle (hammer, engulfing) at the band plus RSI confirmation (<35 for longs, >65 for shorts). Don't enter on band touch alone.

W pattern (bullish): First low at/below lower band, rally to middle, second low (often not touching band), buy on break above middle band. M pattern (bearish): Inverse - sell on break below middle band.

Band width = (Upper - Lower) / Middle × 100. Low values (<1.5-2%) indicate squeeze (breakout coming). High values (>3.5%) indicate expansion (may contract). Use it to choose between mean reversion and breakout strategies.

Keep dollar risk constant (1-2%). Wide bands = larger stops = fewer contracts. Narrow bands = tighter stops = more contracts. Formula: Contracts = Risk $ / (Stop distance × point value).

Yes! VWAP provides directional bias (above = bullish, below = bearish). BBs provide timing. Best trades: Long at lower BB when above VWAP, short at upper BB when below VWAP.

When Bollinger Bands contract inside Keltner Channels (which use ATR). This indicates extreme low volatility and often precedes significant breakouts. Many traders use the TTM Squeeze indicator for this.

Analyze: momentum oscillator direction (TTM Squeeze histogram), price position within squeeze (near upper = bullish bias), prior trend direction (continuation more likely), and volume patterns (accumulation vs distribution).

Customize for: specific timeframes (shorter period for faster charts), trading style (tighter bands for more signals), and market conditions (wider bands for volatile periods). Always backtest changes.

Display 1σ, 2σ, and 3σ bands. 1σ = first warning, 2σ = standard signal zone, 3σ = extreme/rare (highest probability reversal). Price at 3σ is statistically rare (<0.3% of time).

Optimize parameters on in-sample data, test on out-of-sample, roll forward and repeat. Aggregating out-of-sample results validates that parameters work on unseen data, avoiding curve-fitting.

Categorize each trade by regime (ranging, trending, squeeze). Track win rate, profit factor, and average R separately for each. This reveals which regimes you trade best and where to improve.