Bollinger Reversal + Swing Exit

Bollinger Reversal + Swing Exit is a mean-reversion strategy designed to capture short-term reversals when price stretches to an extreme and then shows the first signs of rejection.

1. Core idea
This strategy assumes that sharp deviations from a central equilibrium are often followed by a corrective move back toward normal pricing. It does not chase trends. Instead, it waits for price to reach an extreme area and then looks for a controlled turn back in the opposite direction.

2. Signal concept
A setup starts only after price reaches an outer extreme zone. The trade is taken only if the market immediately shows a reversal-type reaction rather than continuing to push outward. This reduces entries that happen too early while the move is still accelerating.

3. Long and short behavior
Long trades are allowed only after a downside extreme has been reached and price begins to recover.
Short trades are allowed only after an upside extreme has been reached and price begins to fade.
The goal is to enter close enough to the extreme to keep risk contained, while still requiring evidence that the turn has started.

4. Risk control
Risk is defined tightly. The protective stop is placed where the reversal thesis is clearly invalidated, so the strategy is built to accept small losses when the market does not revert and continues expanding in the same direction.

5. Exit logic
Profits are taken based on local market structure rather than fixed targets. Once in a position, the strategy looks for a clear exhaustion point in the move and closes the trade when the short-term swing structure signals that the rebound or pullback has likely completed. This aims to capture the core of the corrective move without overstaying.

6. Best conditions
This approach performs best in range-bound markets, during consolidations, and in instruments that frequently oscillate around a fair value. It is also useful after impulsive spikes when the move becomes overstretched and liquidity rebalances.

7. When to avoid
Avoid using it during strong, clean trends and during persistent breakout phases, where extremes can keep extending and reversals can fail repeatedly. In these conditions, mean-reversion setups can be systematically punished.

8. What to expect
Expect a higher trade frequency than trend-following systems, with many small-to-medium wins and occasional sharp losses when the market refuses to revert. The edge comes from disciplined entries only after extremes and quick exits when structure signals completion.