Does Bollinger Bands Actually Work? We Backtested It on 741 Assets

The honest answer

Bollinger Bands are everywhere, used for everything — usually contradictorily. So we ran Bollinger Bands through the same out-of-sample, cost-included engine as every other indicator on 741 assets. The verdict: it's a niche tool, not a holy grail.

Across every asset we tested it on, Bollinger Bands beat a simple buy-and-hold on just 8% of them, with a median Sharpe of 0.21.

What Bollinger Bands actually is

Bollinger Bands wrap a moving average in volatility bands. We test the breakout version: long when price closes above the upper band.

We test the standard, textbook version — no curve-fitting, no tuned settings per asset. That's deliberately a fair fight, and it's why these numbers are lower (and more honest) than the backtests you'll see in a course sales page.

Where it does work

It wasn't the single best indicator for any asset we tested — every asset had something that beat it.

Check the Bollinger Bands page for the exact assets and timeframes it wins on.

The bottom line

Bollinger Bands is a real tool, but it's not magic — like almost every single indicator, it loses to buy-and-hold on most assets. The edge, when it exists, is asset-specific. Don't trade it blind; check whether it actually works on your asset first.