Bollinger band walks: when the touch is not a reversal

[Shadow Trader]

A common rule says that when price touches the upper Bollinger band, it is overextended and likely to revert. That works in ranges. In trends, price can ride the band for a long time, producing what traders call a band walk.

On a one-minute chart, a band walk can last ten, twenty, or more bars. Each touch looks like a fade opportunity, and each fade runs into a continuing trend.

Telling the difference between a range touch and a band walk starts with context. The width of the bands is one clue: expanding bands suggest rising volatility and a possible trend, while narrow, flat bands suggest a range. Another is the slope of the middle line. A steep slope favours a walk.

A simple filter is to avoid fading band touches when the bands are widening, and to prefer entries after price closes back inside the band.

Backtesting this on a few months of data usually reveals how much a basic band-touch strategy loses during trends.

How do you distinguish a band walk from a genuine reversal setup?