Claim check: Bollinger Band bounce
“Price touching the lower Bollinger Band is a buy; upper band is a sell.”
What the data says
Does not hold Not supported by the data: after “Close below the lower band”, the average 10-day return was -0.1% against +0.2% for all days (medians over 10 markets); it was higher than usual in 5 of 10 markets and statistically clear, with at least 20 independent events and the same sign in both halves, in 0. Results are mixed across markets and cannot be told apart from chance.
No effect we can tell from chance, or the opposite effect.
Who says it
John Bollinger's bands (1980s); every retail trading tutorial.
Origins are as commonly cited and were not independently verified.
How we tested it
Bands are the 20-day average plus and minus two sample standard deviations of the close. Event: the close is below the lower band. We record the 10-trading-day return that follows (events at least 10 days apart) and compare it with the market's average 10-day return. The upper-band half is checked the same way (returns should be lower than average).
Results
Close below the lower band 10-day (claim: higher than average)
| Market | Events | Mean after | All days | Difference | Median after | Up share | t-stat | Reading |
|---|---|---|---|---|---|---|---|---|
| S&P 500 | 82 | +1.2% | +0.6% | +0.7% | +1.5% | 67% | 1.9 (likely noise) | Right way, likely noise |
| Gold | 86 | +0.4% | +0.3% | +0.1% | +0.5% | 56% | 0.3 (likely noise) | Right way, likely noise |
| Silver | 82 | -0.5% | +0.4% | -0.9% | -0.6% | 44% | -1.6 (likely noise) | No effect |
| Oil | 82 | -0.6% | +0.1% | -0.7% | -0.2% | 49% | -0.8 (likely noise) | No effect |
| Natural gas | 74 | -0.7% | -0.7% | +0.1% | -1.9% | 38% | 0.1 (likely noise) | Right way, likely noise |
| Commodities | 86 | -0.1% | +0.2% | -0.3% | +0.4% | 51% | -0.8 (likely noise) | No effect |
| Agriculture | 87 | +0.1% | +0.1% | +0.1% | 0.0% | 49% | 0.2 (likely noise) | Right way, likely noise |
| EUR/USD | 96 | 0.0% | 0.0% | 0.0% | +0.1% | 54% | 0.2 (likely noise) | Right way, likely noise |
| Bitcoin | 74 | +0.1% | +1.8% | -1.7% | +0.5% | 54% | -1.3 (likely noise) | No effect |
| Ether | 61 | -1.5% | +1.7% | -3.2% | +1.4% | 56% | -2.1 | Opposite, significant |
Difference from the average, by market (10-day)
By horizon: mean difference from all days
| Market | 5-day | 10-day | 21-day |
|---|---|---|---|
| S&P 500 | +0.3% (99) | +0.7% (82) | +0.7% (68) |
| Gold | -0.1% (96) | +0.1% (86) | -0.1% (72) |
| Silver | -0.8% (95) | -0.9% (82) | +0.1% (71) |
| Oil | -0.5% (97) | -0.7% (82) | -0.2% (72) |
| Natural gas | -0.6% (82) | +0.1% (74) | -2.0% (65) |
| Commodities | -0.2% (100) | -0.3% (86) | -0.6% (70) |
| Agriculture | +0.1% (105) | +0.1% (87) | +0.3% (74) |
| EUR/USD | +0.1% (114) | 0.0% (96) | -0.1% (78) |
| Bitcoin | -1.5% (84) | -1.7% (74) | -3.5% (62) |
| Ether | -1.9% (73) | -3.2% (61) | -4.8% (52) |
Average -day return after the signal vs all days (S&P 500)
Close above the upper band · For comparison 10-day (claim: lower than average)
| Market | Events | Mean after | All days | Difference | Median after | Up share | t-stat | Reading |
|---|---|---|---|---|---|---|---|---|
| S&P 500 | 83 | +0.5% | +0.6% | -0.1% | +0.5% | 65% | -0.4 (likely noise) | Right way, likely noise |
| Gold | 93 | +0.5% | +0.3% | +0.2% | +0.2% | 54% | 0.6 (likely noise) | No effect |
| Silver | 96 | +0.7% | +0.4% | +0.3% | +0.5% | 52% | 0.4 (likely noise) | No effect |
| Oil | 78 | +1.0% | +0.1% | +0.8% | +1.1% | 59% | 1.1 (likely noise) | No effect |
| Natural gas | 82 | -1.1% | -0.7% | -0.4% | -1.4% | 40% | -0.3 (likely noise) | Right way, likely noise |
| Commodities | 86 | +0.2% | +0.2% | 0.0% | -0.2% | 48% | 0.0 (likely noise) | No effect |
| Agriculture | 79 | +0.4% | +0.1% | +0.3% | +0.4% | 57% | 1.0 (likely noise) | No effect |
| EUR/USD | 91 | -0.1% | 0.0% | 0.0% | +0.1% | 52% | -0.1 (likely noise) | Right way, likely noise |
| Bitcoin | 113 | +3.3% | +1.8% | +1.5% | +1.4% | 54% | 1.4 (likely noise) | No effect |
| Ether | 79 | +4.5% | +1.7% | +2.9% | +1.1% | 56% | 1.5 (likely noise) | No effect |
Stability across the two halves of history
A saying that only works in one half of the history is not much of a rule. Each row shows the effect in the full history, the first half and the second half; green means the claimed effect was present.
| Market | Full history | First half | Second half |
|---|---|---|---|
| S&P 500 | +0.7% (82) | +0.9% (40) | +0.5% (42) |
| Gold | +0.1% (86) | +0.1% (45) | +0.1% (41) |
| Silver | -0.9% (82) | -1.1% (44) | -0.6% (38) |
| Oil | -0.7% (82) | -0.7% (45) | -0.5% (37) |
| Natural gas | +0.1% (74) | 0.0% (38) | +0.1% (36) |
| Commodities | -0.3% (86) | -0.7% (46) | +0.2% (40) |
| Agriculture | +0.1% (87) | +0.2% (50) | -0.1% (37) |
| EUR/USD | 0.0% (96) | 0.0% (46) | +0.1% (50) |
| Bitcoin | -1.7% (74) | -2.7% (34) | -0.7% (40) |
| Ether | -3.2% (61) | -4.6% (31) | -1.8% (30) |
Context and cross-checks
Shown for context; not part of the verdict.
Buy under the lower band, exit at the middle band or after 10 days
| Market | Period | CAGR | Buy and hold | Sharpe | Buy and hold | Max drawdown | Buy and hold | In market | Trades | Reading |
|---|---|---|---|---|---|---|---|---|---|---|
| S&P 500 | 2010-02-02 → 2026-11-10 | +4.4% | +14.1% | 0.46 | 0.86 | -22% | -34% | 14% | 83 | No effect |
| Gold | 2010-02-02 → 2026-11-10 | +2.1% | +7.5% | 0.31 | 0.52 | -26% | -46% | 16% | 84 | No effect |
| Silver | 2010-02-02 → 2026-11-10 | -1.3% | +6.4% | -0.03 | 0.36 | -54% | -76% | 17% | 84 | No effect |
| Oil | 2010-02-02 → 2026-11-10 | -4.9% | -4.4% | -0.20 | 0.06 | -74% | -95% | 16% | 81 | No effect |
| Natural gas | 2010-02-02 → 2026-11-10 | -5.5% | -24.9% | -0.21 | -0.34 | -71% | -99% | 16% | 74 | Clear and stable |
| Commodities | 2010-02-02 → 2026-11-10 | -1.3% | +2.6% | -0.12 | 0.23 | -50% | -66% | 18% | 88 | No effect |
| Agriculture | 2010-02-02 → 2026-11-10 | +1.0% | +1.0% | 0.19 | 0.15 | -33% | -62% | 17% | 87 | Full history only |
| EUR/USD | 2010-01-29 → 2026-11-10 | +0.4% | -1.3% | 0.13 | -0.10 | -11% | -35% | 18% | 94 | Clear and stable |
| Bitcoin | 2014-10-07 → 2026-11-10 | +0.2% | +56.2% | 0.15 | 0.84 | -64% | -83% | 15% | 75 | No effect |
| Ether | 2017-11-29 → 2026-11-10 | -11.1% | +19.1% | -0.08 | 0.53 | -72% | -94% | 17% | 61 | No effect |
Sharpe ratio minus buy-and-hold
The site's own strategies
| Strategy | Market | Sharpe, 5 years | Benchmark, 5 years | Sharpe, full | Benchmark, full | CAGR, full | Benchmark, full | Max DD, full | Benchmark, full | Reading |
|---|---|---|---|---|---|---|---|---|---|---|
| MR-02 Bollinger Band Reversion | SPY | 0.39 | 0.72 | 0.34 | 0.85 | +2.7% | +13.8% | -20% | -34% | No effect |
| MR-02 Bollinger Band Reversion | GLD | 0.18 | 0.89 | 0.13 | 0.51 | +0.6% | +7.5% | -23% | -46% | No effect |
| MR-02 Bollinger Band Reversion | USO | 0.74 | 0.68 | -0.09 | 0.05 | -2.3% | -4.8% | -67% | -95% | No effect |
| MR-02 Bollinger Band Reversion | EUR/USD | 0.28 | -0.05 | -0.14 | -0.13 | -0.5% | -1.5% | -17% | -35% | No effect |
| MR-02 Bollinger Band Reversion | DBC | 0.81 | 0.63 | 0.21 | 0.21 | +1.3% | +2.2% | -27% | -66% | Clear and stable |
| MR-02 Bollinger Band Reversion | SLV | -0.11 | 0.57 | -0.02 | 0.35 | -0.8% | +6.1% | -37% | -76% | No effect |
| MR-02 Bollinger Band Reversion | DBA | 0.50 | 0.68 | 0.08 | 0.13 | +0.3% | +0.8% | -23% | -62% | No effect |
| MR-02 Bollinger Band Reversion | UNG | 0.08 | -0.27 | -0.27 | -0.35 | -4.9% | -25.1% | -69% | -99% | Clear and stable |
| MR-02 Bollinger Band Reversion | BTC | -0.12 | 0.25 | 0.17 | 0.80 | +1.7% | +52.0% | -68% | -83% | No effect |
| MR-02 Bollinger Band Reversion | ETH | 0.16 | 0.09 | 0.16 | 0.56 | +1.0% | +22.9% | -61% | -94% | No effect |
Sharpe ratio minus benchmark, full history · Benchmark = the buy-and-hold shown on the strategy pages.
The honest caveat
In strong trends price can ride the band for weeks, so averages mix very different regimes.
Descriptive statistics from historical data, before costs. Not a forecast and not investment advice.
Questions
Price touching the lower Bollinger Band is a buy; upper band is a sell.
Not supported by the data: after “Close below the lower band”, the average 10-day return was -0.1% against +0.2% for all days (medians over 10 markets); it was higher than usual in 5 of 10 markets and statistically clear, with at least 20 independent events and the same sign in both halves, in 0. Results are mixed across markets and cannot be told apart from chance.
How was this claim tested?
Bands are the 20-day average plus and minus two sample standard deviations of the close. Event: the close is below the lower band. We record the 10-trading-day return that follows (events at least 10 days apart) and compare it with the market's average 10-day return. The upper-band half is checked the same way (returns should be lower than average).
Related strategies on Quant Arena
Markets used
S&P 500 · Gold · Silver · Oil · Natural gas · Commodities · Agriculture · EUR/USD · Bitcoin · Ether