📊Bollinger Bands Strategy

What are Bollinger Bands?

Bollinger Bands are a popular technical analysis tool used to identify price volatility and potential entry/exit points. Bands consist of the following:

• Middle Band: A simple moving average (SMA), usually calculated over a period of time. Moving averages are calculated based on the average of the closing prices of the periods (1h, 4h, 1d) during the period.

• Upper and lower bands: Bands drawn according to the standard deviation above and below the SMA show how much the price deviates from the average. The price usually moves between these two bands.

Bollinger Bands Farmly Easy Farms Strategy

The price range for concentrated liquidity is set in Farmly Easy Farm using Bollinger Bands. For the price range, the upper price is taken as the upper band of the Bollinger Bands and the lower price is taken as the lower band of the Bollinger Bands.

The upper and lower Bollinger bands narrow and widen according to the price volatility. When Easy Farms exceeds the defined deviation limit from the current price range (0.5%), the liquidity range is updated according to the new Bollinger bands of the price.

Bollinger Bands Strategy Parameters:

• Period: 1 hour

• Moving Average: 20

• Coefficient of Standard Deviation: 3

• Band Deviation Limit: 0.5%

• Performance Fee: %20 (from trading fees earned by the strategy from farming)

Performance Fee Description:

The Performance Fee is charged only on the trading fees from farming operations performed by the strategy. There is no deduction from the user's deposited funds. It is only a commission on the income that the strategy generates for the user. As a result, users will not see a deduction from their funds when they wish to withdraw their liquidity.

Backtest Results:

The backtest results graph is shown in detail in the image below.