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FreeIndicators·ThinkorSwim

Bollinger Reversal

Mean-reversion signals off Bollinger Band extremes.

How to install in ThinkorSwim

  1. In ThinkorSwim, open a chart, then go to Studies → Edit Studies.
  2. Click Create, clear the editor, and paste the code.
  3. Name it, click Apply, then OK, and it draws on your chart.

How to Use — WeTradePro Bollinger Reversal

Arrows the bar price closes back INSIDE the Bollinger Bands after poking outside — the moment a stretch fails and reverts. Educational, not advice.

What it is (one line)

A mean-reversion signal that fires when price re-enters the Bollinger Bands after closing (or wicking) outside them — catching the snap-back, not the breakout.

Who it's for & best timeframe

Trader typeHow you use itBest timeframeRecommended setting
Day traderFade intraday band pokes back to the mid-band (VWAP-like reversion)1-min – 15-minlength 20, requireClose no
Swing traderBest fit — buy the green arrow at the lower band, sell into the mid/upperDailylength 20, requireClose yes
Position traderNote weekly band re-entries as exhaustion of an extended moveWeeklylength 20

Best overall: Daily, `requireClose yes`. Requiring a prior *close* outside the band filters out noisy wick fakes.

What you see (overlay on price)

  • Gray bands + shaded cloud: standard Bollinger Bands; dashed mid-band is the reversion target.
  • Green up arrow (below the bar): price poked below the lower band and closed back inside → reversion long.
  • Red down arrow (above the bar): price poked above the upper band and closed back inside → reversion short.
  • Labels: confirm the active fade and the band settings.

How to trade it (the core play)

  1. Take arrows that agree with the higher-timeframe trend — green arrows in an uptrend pullback are best.
  2. Enter on the arrow bar's close (or next bar open).
  3. Stop just beyond the extreme of the poke (the wick that went outside).
  4. First target: the mid-band (dashed line). That's the textbook reversion destination.
  5. Runner: the opposite band if momentum carries.

Settings (inputs)

  • length (20) — Bollinger lookback.
  • numDev (2.0) — band width in standard deviations. Wider = rarer, stronger pokes.
  • requireClose (yes) — yes: prior bar must *close* outside (stricter, cleaner). no: a wick outside counts (more signals, intraday).

Best on

  • Range-bound and pullback conditions on liquid names: SPY, QQQ, AAPL, MSFT, large-cap ETFs.

Common mistakes

  • Fading a band-walk — in a strong trend price rides the band; one re-entry can fail. Respect the higher-TF trend.
  • Chasing the poke instead of the re-entry — the edge is the close back *inside*.
  • No stop beyond the wick — reversion trades that fail, fail fast.
  • Using `requireClose no` on the Daily — too many wick fakes; reserve it for intraday.

Video script outline (for your WeTradePro tutorial)

  1. Hook: "Don't trade the poke. Trade the snap-back."
  2. Show price closing outside, then re-entering — the arrow prints.
  3. The mid-band as the natural first target.
  4. Why requireClose yes filters fakes on the Daily.
  5. Aligning arrows with the bigger trend.
  6. Stop beyond the wick, target the mid-band.
  7. Recap + "import link in description."

Educational analysis, not financial advice.

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