Natural Gas Bollinger Band

Start with standard settings: 20-period, 2.0 standard deviation. Natural gas's high volatility may benefit from 2.5 SD during very volatile periods. The 20-period works well for capturing natural gas swings on 15-minute charts.

Check bandwidth: If bandwidth < 3% (squeeze), expect breakout - don't mean revert. If bandwidth 3-6% (normal), mean reversion works well. Also check middle band slope - flat slope favors mean reversion, steep slope suggests trend (band walk possible).

Common reasons: (1) Trading in squeeze (breakout occurs), (2) Fighting a band walk (steep trend), (3) Stops too tight for natural gas volatility, (4) Not waiting for reversal candle confirmation. Always check bandwidth and slope before mean reverting.

No. Wait for confirmation: RSI at extreme, reversal candle pattern, volume increase. Many band touches don't result in reversals, especially during squeezes or trends. Quality over quantity - only trade confirmed setups.

Bandwidth measures how wide the bands are (volatility). %B measures where price is within the bands (0 = at lower band, 1 = at upper band, 0.5 = at middle). Both are useful - bandwidth for regime, %B for entry signals.

TTM Squeeze compares BB to Keltner Channels. Squeeze ON when BB inside KC. Wait for Squeeze OFF (BB expand outside KC). Enter in direction of momentum at the moment squeeze fires. This provides higher probability breakouts than BB squeeze alone.

Use 1 SD (inner) and 2 SD (outer) bands. Beyond outer bands = reversal zones (highest probability). Between inner and outer = trend zones. Between inner bands = neutral (no trade). This creates clearer trading zones than single BB.

Adjust based on volatility regime: High volatility → wider SD (2.5-3.0). Low volatility → standard or tighter (2.0). Also consider time of day - morning sessions may need wider bands. Avoid changing parameters too frequently.

Look for price at BB extreme (upper or lower band) WITH RSI divergence. Bullish: Price lower low at lower band + RSI higher low. Bearish: Price higher high at upper band + RSI lower high. This combination signals exhaustion - high probability reversal.

Generally no. The EIA natural gas storage report (Thursday 10:30 AM ET) creates massive volatility that can invalidate any technical setup. Close or reduce BB positions by about 10:15 AM Thursday. Re-enter after volatility settles (after roughly 11:00 AM ET).

Test period (15-30) and SD (1.5-3.0) combinations on 2+ years data. Use walk-forward optimization: optimize on 6 months, test on 3 months, repeat. Natural gas typically performs well with 20/2.0-2.5. Segment by volatility regime for condition-specific parameters.

Calculate BB continuously (middle, upper, lower, bandwidth, %B). Create regime classifier (squeeze/normal/expanded). Build signal generators for each strategy (mean reversion, breakout, band walk). Apply filters (bandwidth, RSI, volume, time). Track performance by regime for optimization.

Use ATR percentile to identify regime. Low volatility: Focus on squeeze breakouts, tighter bands. Normal: Full strategy toolkit, standard parameters. High volatility: Band walks preferred, wider bands, smaller positions, avoid aggressive mean reversion.

Compare the front-month NG (Henry Hub) BB position to the UNG ETF and the broader energy complex. Synchronized extremes = higher conviction. The front-month NG future often leads UNG and the deferred (back-month) contracts. Divergence (NG oversold but UNG or crude neutral) warrants investigation - often roll/contango or a one-off spike. Use cross-market confirmation to size positions and set targets.

Track by strategy type (mean reversion, breakout, band walk) and regime (squeeze/normal/expanded). Key metrics: Win rate, profit factor, average win/loss, max drawdown. Compare across regimes to identify when each strategy works best. Quarterly review and optimization.