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Backtest Entropy Bollinger Band Strategy Using Python with Futures Data
Alpha Bollinger Band Trading Strategy
The Entropy Alpha Strategy is an exclusive trading approach based on the principles of the Entropy System, which revolves around probability distribution theories, with Bollinger Bands serving as its primary tool.
Although We are not going deep into the strategies’ definitive principles let's discuss the basic core of the strategy to show how new strategies can be modeled with the principles of the Entropy System.
The 3BB (3 Bollinger Bands) strategy is a trading approach that combines Bollinger Bands with specific candlestick patterns to minimize losses and capitalize on high-confidence breakout opportunities, particularly when the 3rd candle in a formation indicates a potential reversal or downward movement.
In the chart example featuring Grasim, you can observe two successful 3BB trades that unfolded seamlessly.
Upon zooming out, the broader perspective reveals a discernible uptrend in the market.
