Three Bollinger Scalp

Three Bollinger Scalp looks for short-lived price extremes using three Bollinger Band envelopes calculated from the same middle line. The inner, middle, and outer envelopes form zones rather than a single “price crossed a band” trigger.

The strategy buys when price reaches a configurable depth between the inner and middle lower bands, without moving beyond the outer lower band. It can then exit at a fixed target, the Bollinger middle line, the first of those two levels, or a profitable upper-band reversal.

This is a mean-reversion strategy. It is designed for markets that repeatedly stretch away from a stable average and recover. It is not designed to keep buying an accelerating sell-off.

warning

Small mean-reversion targets can disappear after spread, fees, and slippage. Test the exact pair, exchange, period, and fee rate you intend to use. An optional stop is available, but it is disabled by default.

How the three bands work

All three envelopes use TBB_BB_LENGTH for their middle line and volatility measurement. Their deviation settings determine how far each envelope sits from that average:

• The red band is the inner envelope.
• The orange band is the middle envelope.
• The yellow band is the outer envelope.

With the defaults, red uses 2 standard deviations, orange uses 3, and yellow uses 4. The bands should remain ordered from narrowest to widest. In normal use:

TBB_RED_DEVIATION < TBB_ORANGE_DEVIATION < TBB_YELLOW_DEVIATION

The strategy uses the red-to-orange space as its entry zone. The yellow band limits how far outside the expected range a candle may travel and still qualify.

Entry behavior

TBB_ENTRY_DEPTH selects a point between the lower red and lower orange bands:

• 0 places the threshold at the red band.
• 0.5 places it halfway between red and orange.
• 1 places it at the orange band.

The candle low must reach that threshold, but it must not fall below the outer yellow band. Increasing the depth therefore demands a larger downward stretch before entry. It usually reduces the number of trades and seeks a better entry price, but it can also select more forceful declines.

When TBB_REQUIRE_RETRACE_CLOSE is enabled, the candle must also show some recovery: it must either close above its open or close back above the lower red band. This filter helps avoid entries on candles that only continue falling.

The strategy holds one position at a time and does not average down.

Exit modes

TBB_EXIT_MODE controls the primary profit target:

• middle aims for the Bollinger middle line. If that line is not above the entry, the configured fixed target is used instead.
• pips always uses the configured fixed distance. Despite the label, this distance comes from TBB_TARGET_PIPS in pip mode and TBB_TARGET_PCT in percentage mode.
• first uses whichever valid target above the entry is closer: the middle line or the configured fixed target.

The selected target is established when the position opens. It is also raised when necessary to cover estimated round-trip fees and TBB_MIN_NET_GAIN_PCT.

TBB_EXIT_ON_UPPER_EXTREME adds another possible exit. It looks for price to reach a configurable depth between the upper red and orange bands, while remaining below the upper yellow band. With retrace confirmation enabled, the candle must show a retreat from that upper area. This signal sells only when the position has reached the strategy’s fee-aware profitable level.

Protection and maximum holding time

Enable TBB_USE_PROTECTION to activate the price stop. The strategy uses TBB_STOP_PIPS in pip mode or TBB_STOP_PCT in percentage mode.

TBB_MAX_HOLD_MS can close a position after a maximum age, but it is also part of the protection system. It only operates while TBB_USE_PROTECTION is enabled. Set it to 0 to disable the time limit.

Unlike the upper-extreme exit, a protective price stop or time stop can realize a loss. This is their purpose: they define when a failed mean-reversion trade should no longer remain open.

Good market conditions

Three Bollinger Scalp is most at home when:

• the market is liquid and spreads remain consistently small;
• price oscillates around a reasonably stable average;
• Bollinger Bands are wide enough to offer usable movement, but not expanding violently;
• downward extremes often retrace instead of developing into sustained sell-offs;
• the selected target is realistic after fees and slippage.

A good example is a range or gently rising market with repeated lower-band wicks followed by recoveries toward the middle. A lower-zone touch that occurs after an orderly stretch is generally more suitable than one caused by a sudden collapse.

Use extra care when the middle line is falling steeply, the envelopes are rapidly expanding, or price repeatedly rides the lower band. Those conditions can indicate a directional downtrend rather than a temporary deviation. Very narrow bands can also generate signals whose available movement is too small to cover costs.

Creating the strategy

Create a spot strategy and choose Three Bollinger Scalp as the buy and sell method. Start in backtesting or paper trading.

A useful first setup process is:

1. Choose a liquid pair and inspect its normal spread.
2. Keep the default 2/3/4 deviation structure initially.
3. Decide how deep price must enter the red-to-orange zone.
4. Keep retrace confirmation enabled until tests show a reason to remove it.
5. Compare first, middle, and pips exit behavior.
6. Decide explicitly whether the position needs price and time protection.
7. Test trending declines as well as favorable ranging periods.

Strategy settings

Trading and order size

Setting	Description
BUY_ENABLED	Enables new buy orders. Disable it to stop new entries.
SELL_ENABLED	Enables strategy sell orders. Disabling it prevents normal and protective strategy exits.
PERIOD	Candle period used for the Bollinger calculations and signals.
TRADING_LIMIT	Compatibility fallback only. It is ignored while the strategy-specific trading limit contains a positive value. Configure the strategy-specific setting for normal use. For USDT-BTC, this value is in USDT.
TBB_TRADING_LIMIT	For USDT-BTC, the amount of USDT this strategy attempts to use per entry.
FUNDS_RESERVE	For USDT-BTC, the amount of USDT the bot must leave unused.
KEEP_QUOTE	For USDT-BTC, the amount of BTC the strategy must not sell.
MIN_VOLUME_TO_BUY	General minimum value for a buy order. For USDT-BTC, this value is in USDT.
MIN_VOLUME_TO_SELL	General minimum position value for a sell order. For USDT-BTC, this value is in USDT.
TBB_MIN_ORDER_VALUE	Strategy-specific minimum buy value. For USDT-BTC, this value is in USDT.
TBB_MIN_SELL_VALUE	Strategy-specific minimum sell value. For USDT-BTC, this value is in USDT.

Orders must also satisfy the exchange’s minimums and available balance.

Timing, spread, and entry blocking

Setting	Description
TBB_COOLDOWN_MS	Minimum time in milliseconds between strategy actions.
TBB_ENFORCE_COOLDOWN_IN_BACKTEST	Applies the same cooldown during backtests. Keep this enabled when you want timing behavior closer to live use.
TBB_MAX_SPREAD_PCT	Maximum allowed bid/ask spread as a percentage.
TBB_MAX_SPREAD_ABSOLUTE	Optional maximum spread in USDT for a pair such as USDT-BTC. 0 disables this absolute limit.
TBB_NEWS_BLOCK	Manually blocks new entries. Existing positions can still be managed.
TBB_NEWS_BLOCK_UNTIL	Keeps new entries blocked until the configured time.

The percentage and absolute spread checks are both enforced when the absolute limit is non-zero. Absolute values are pair-specific: the same number is not appropriate for assets with very different prices.

Bollinger zones and signals

Setting	Description
TBB_BB_LENGTH	Number of candles used for all three Bollinger envelopes. Higher values create a slower, smoother reference.
TBB_RED_DEVIATION	Width of the inner envelope in standard deviations.
TBB_ORANGE_DEVIATION	Width of the middle envelope. Keep it above the red deviation.
TBB_YELLOW_DEVIATION	Width of the outer boundary. Keep it above the orange deviation.
TBB_ENTRY_DEPTH	Entry threshold between the red and orange bands, from 0 to 1.
TBB_REQUIRE_RETRACE_CLOSE	Requires the signal candle to show recovery from the lower zone; it also asks upper-extreme exits to show rejection from the upper zone.
TBB_EXIT_ON_UPPER_EXTREME	Enables profitable exits after price reaches and rejects the corresponding upper zone.

If the deviations are entered out of order, the intended inner/middle/outer zone logic no longer represents a conventional three-band structure.

Profit target

Setting	Description
GAIN	General gain fallback retained in the configuration. The strategy normally uses its TBB_ target controls.
TBB_EXIT_MODE	Selects first, middle, or pips target behavior.
TBB_USE_PIPS	Uses pip distances instead of percentage distances for the fixed target and stop.
TBB_PIP_SIZE	For USDT-BTC, the USDT value represented by one pip.
TBB_TARGET_PIPS	Requested fixed target in pips. The strategy constrains it to the configured minimum and maximum.
TBB_TARGET_PIPS_MIN	Lowest permitted pip target.
TBB_TARGET_PIPS_MAX	Highest permitted pip target.
TBB_TARGET_PCT	Fixed percentage target when pip mode is disabled.
TBB_MIN_NET_GAIN_PCT	Additional minimum intended gain above estimated fee break-even. It can raise the effective target.

The minimum and maximum pip settings only constrain TBB_TARGET_PIPS; they do not create a dynamic target range. If you enter a target below the minimum or above the maximum, the nearest boundary is used.

Protection

Setting	Description
TBB_USE_PROTECTION	Enables both the configured price stop and, when set, the maximum holding-time exit.
TBB_STOP_PIPS	Stop distance in pips when pip mode is enabled.
TBB_STOP_PCT	Stop distance as a percentage when pip mode is disabled.
TBB_MAX_HOLD_MS	Maximum position age in milliseconds. 0 disables it; a positive value requires protection to be enabled.

Backtesting range

Setting	Description
BF_SINCE	Start of the backtesting period.
BF_UNTIL	End of the backtesting period.
DEEP_TESTING	Enables the deeper backtesting mode available in the editor.

Practical tuning directions

For fewer, deeper entries, increase TBB_ENTRY_DEPTH. For earlier entries, move it toward 0. Do not assume that deeper is automatically safer: in a strong downtrend, a deeper touch can simply reflect stronger selling.

For a conservative confirmation, keep TBB_REQUIRE_RETRACE_CLOSE enabled. Disabling it makes the low-zone touch sufficient and can enter before the candle demonstrates any recovery.

Use first when you want the nearest realistic recovery objective. Use middle when the strategy should primarily trade a return to the average. Use pips when you want a consistent fixed-distance objective independent of the middle line.

Shorten TBB_BB_LENGTH for a faster-moving envelope and more responsive zones. Lengthen it for a steadier reference with slower signals. Any change should be retested with the deviation structure and chart period, because these controls shape the same bands together.

Important limitations

• Bollinger extremes do not guarantee reversal.
• The strategy can buy only one qualifying lower-zone candle; it does not scale into a continuing decline.
• The outer yellow band blocks candles that move beyond it, but price can still continue falling after a valid entry.
• Upper-extreme exits require sufficient profitability and are not loss exits.
• Time exits do nothing unless protection is enabled.
• Very small fixed targets may be raised by fee and minimum-gain requirements.
• Backtests cannot perfectly reproduce live spread, slippage, latency, or liquidity.

The strategy is most useful when its three envelopes describe a repeatable trading range. If the bands are primarily documenting a strong directional collapse, waiting for better conditions is often more important than tuning the entry depth.