Bollinger Bands wrap a moving average in a channel that widens and narrows with volatility. Ice Juice Trading's Bollinger Reversion template automates the classic mean-reversion play on your own Alpaca account — it buys when price closes below the lower band and exits when it reverts to the middle. You set the risk limits; it runs on paper first. No code.
Bollinger Bands plot a middle line — a 20-day simple moving average — with an upper and lower band set two standard deviations away from it. Because the bands are built on standard deviation, they expand when a stock gets volatile and contract when it's calm. A close below the lower band means price has stretched unusually far below its recent average, which mean-reversion traders read as stretched-and-likely-to-snap-back — toward the middle band.
Enter when price closes below the lower band — the 20-day average minus 2 standard deviations.
Exit on reversion to the middle band (20-day average).
Buy the stretch, sell the snap-back to the mean. Every knob is yours to set: dollars per position, stop-loss %, maximum open positions, and profit-taking — or point the same rule at your own basket of tickers.
Like any mean-reversion approach, Bollinger Reversion does well in range-bound, oscillating markets and struggles in strong trends — in a hard downtrend, price can "walk down" the lower band, and buying each touch means buying into continued weakness. That's why your stop-loss matters, and why testing it on the names you trade is essential rather than assuming it fits everything.
In our own 3-year backtest, the built-in Bollinger Reversion template won 63.4% of 1,589 trades — a large sample. Those results are hypothetical, don't reflect actual trading, and past performance does not guarantee future results. Use the built-in backtester to run it over history on your own basket, then paper-trade it live on simulated money before risking real capital.
Automate Bollinger Bands on your Alpaca account →
Prefer a faster mean-reversion trigger? See the Dip Buyer (RSI-2), or explore all seven built-in strategies — including Trend Rider (momentum), the Golden Cross, and MACD Cross. Compare plans and pricing (free paper trading included).