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Technical

Bollinger Band Rider

Riding the upper Bollinger Band — trend momentum with a built-in volatility filter.

S&P 500 Universe · Monthly Rebalance · Jan 2023 – May 2026

Growth of $100

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Bollinger Band Rider
S&P 500

Performance Summary (2023–2026)

+137%
3-Year Cumulative Return
+33%
vs. S&P 500 (buy & hold)
1.60
Sharpe Ratio
-15%
Max Drawdown
30.0%
Annualized Return
98%
Monthly Turnover

How it's built

Computes %B = (close − Lower) / (Upper − Lower) using a 20-day moving average ± 2σ. Stocks with the highest %B values are pressing against (or beyond) their upper band, meaning they're trending strongly relative to their own recent volatility. The 2σ envelope acts as an adaptive filter: a stock has to push past two standard deviations of its OWN recent range to score high, which naturally selects clean uptrends rather than noisy moves.

Signals used
tech_bbands_pctb_20

Why it works

Pure price momentum doesn't tell you whether the move is unusual for that stock. A 5% pop in a low-vol utility is significant; a 5% pop in a meme stock is noise. Bollinger %B normalises by each stock's own recent volatility, so the score actually means "this stock is moving more than usual". The volatility-filtered selection keeps the strategy out of the most explosive (and most risky) trades — the trade-off is lower total return in exchange for a tighter -16% drawdown.

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Past performance is not indicative of future results. Backtests are simulated and do not account for transaction costs, slippage, taxes, or the impact of large orders on market prices. All figures shown are hypothetical. This is not investment advice. See our full disclaimer for details.