Last updated: 8 October 2026. Every screenshot below was recorded on 8 October 2026 on an IQ Option Practice account registered in Brazil, on EUR/USD 1-minute candles; the Chart analysis picture in Step 1 was recorded on 5 October 2026. We placed no real-money trade. The tested box shows what the rule, a band that crosses a candle of the matching colour, did on EUR/USD candles recorded between 29 September and 5 October 2026; it says nothing about what will happen next.
The strategy reads the colour of the candle that a Bollinger Band cuts through. When the upper band crosses a bullish (green) candle the move up is expected to go on, so it buys; when the lower band crosses a bearish (red) candle the move down is expected to go on, so it sells. The settings are Bollinger Bands with a period of 20 and a deviation of 2, the entry is the close of that candle, and the trade lasts 5 minutes on 1-minute and on 5-minute candles alike. We replayed the rule on 1,505 one-minute candles: it gave 255 signals and the 5-minute trades won 143 and lost 107, 57.2% of the decided trades, a little above the break-even rate of 54.1% at an 85% payout but within the margin of error. On 5-minute candles the same rule won only 47.2%.
Quick answer
- Indicator: Bollinger Bands with the period changed from the platform’s 14 to 20; deviation 2.
- Higher: the upper band crosses a bullish (green) candle; enter at the close of that candle.
- Lower: the lower band crosses a bearish (red) candle; enter at the close of that candle.
- Expiry: 5 minutes, on 1-minute and on 5-minute candles.
- Avoid: news and fast markets, when the bands are unnaturally wide; a breakout from a narrow band, out of a consolidation, is preferred.
- Tested: 255 signals on 1-minute candles, 5-minute trades won 57.2% of the decided trades; on 5-minute candles 217 signals, 47.2%. Break-even is 54.1% at an 85% payout, and a few days of one pair prove nothing.
How do you set up Bollinger Bands for candle colours?
Set the chart
Choose the asset, the chart type and the candle size first: the indicator is calculated from the candles on the chart. The examples in this guide use 1-minute candles on EUR/USD. These steps use the web traderoom on a Practice balance, and the numbers in each screenshot match the numbers in the text. If you do not have an account yet, see how to register.
Step 1: Open Chart analysis
Click the indicators button (1), the wave icon in the chart toolbar at the bottom left of the chart. The Chart analysis panel opens with the tabs Indicators, Templates, Widgets and Scripts. Stay on Indicators.
Step 2: Find Bollinger Bands
Type “Bollinger” in the Search for indicators box (1) and click Bollinger Bands (2).
Step 3: Set the period to 20
The dialog opens on the Set up & apply tab, on Basic settings (1), with Period 14 and Deviation 2. The strategy uses a period of 20 and a deviation of 2: replace the 14 in Period (2), leave Deviation (3) at 2 and click Apply (4).
Step 4: Use 1-minute candles
Click the candle time period button (1) in the toolbar at the left of the chart; it shows the current period. In the menu that opens, choose 1 minute (2). The strategy trades 1-minute and 5-minute candles; the examples below use 1-minute candles.
Step 5: Read the bands and the candle colours
Three lines are drawn over the candles: the upper band (1), the middle line (2) and the lower band (3). A bullish candle is green and a bearish candle red. The middle line is the simple average of the last 20 closes and the bands lie two standard deviations of those closes above and below it; the platform divides by 20, not by 19. We read the three lines off the platform’s chart at 30 candles and compared them with this calculation: the median difference was 0.002 pip.
What are the entry rules?
Look at where the upper and lower band cross a candle. Buy when the upper band crosses a bullish candle and sell when the lower band crosses a bearish one, and enter at the close of that candle or the open of the next, which is the same moment. Written so that every condition is checked on closed candles:
| Part | Rule |
|---|---|
| Chart | 1-minute candles (or 5-minute), Bollinger Bands with period 20 and deviation 2 |
| Higher signal | The candle closes above its open (bullish) and the upper band lies between its low and its high |
| Lower signal | The candle closes below its open (bearish) and the lower band lies between its low and its high |
| Entry | At the close of the signal candle |
| Expiry | 5 minutes, on 1-minute and on 5-minute candles |
A band “crossing” a candle means that the band line passes through the candle between its low and its high, wicks included. We also replayed a stricter version in which the band has to pass through the body, between the open and the close.
A few rules say when not to trade. Entries come out of a consolidation, when the bands are narrow; news and other fast moves, when the bands are unnaturally wide, are to be avoided; and no two or more positions should be opened on one candle.
Four signals of the recording, step by step
The first four signals of the rule on 1-minute candles, in time order, not picked by outcome; the first two are in the first picture and the third in the second. All times are the platform clock, which is UTC minus three hours; the date is 2 October 2026.
Higher signal at 15:51 and Lower signal at 15:54
The candle (1) that opened at 15:51 and closed at 15:52 at 1.125195 was bullish (it opened at 1.125185), and the upper band, at 1.125237, lay between its low (1.125155) and its high (1.125285). The rule says Higher, and the 5-minute trade opens at that close. It ends at 15:57, when the candle (2) that opened at 15:56 closes at 1.124925, 2.7 pips lower: it lost. Three minutes later the candle (3) that opened at 15:54 was bearish: it opened at 1.125085, its high, and closed at 1.124905, its low, and the lower band, at 1.124994, lay between. The rule says Lower, and the trade opens at the close, 15:55. It ends at 16:00, when the candle (4) that opened at 15:59 closes at 1.125185, 2.8 pips higher: it lost too.
Higher signal at 16:10
The candle (1) that opened at 16:10 and closed at 16:11 at 1.12528 was bullish (it opened at 1.12516), and the upper band, at 1.125273, lay between its low (1.12512) and its high (1.12529). The rule says Higher, and the 5-minute trade opens at that close. It ends at 16:16, when the candle (2) that opened at 16:15 closes at 1.125465, 1.85 pips higher: it won. The fourth signal, a Lower at 16:50, also won: the candle closed at 1.125665 with the lower band at 1.125668 inside its range, and the trade ended 0.85 pip lower.
The candle colours rule, tested
We replayed the rule on 1,505 one-minute candles (2 October and 4 to 5 October 2026) and on 1,334 five-minute candles (29 September to 5 October), entering at the close of every signal candle and scoring the trade 5 minutes later.
Tested on IQ Option: the candle colours and Bollinger Bands rule, EUR/USD candles of 2 to 5 October 2026
| Asset and candles | EUR/USD binary (regular, not OTC): 1,505 one-minute candles (2026-10-02 18:23 to 2026-10-02 20:59 UTC and 2026-10-04 21:01 to 2026-10-05 19:28 UTC); 1,334 five-minute candles (2026-09-29 01:55 to 2026-10-02 20:55 UTC and 2026-10-04 21:00 to 2026-10-05 17:00 UTC). The candles were recorded from IQ Option’s Practice traderoom. The replay places no orders; it only scores the rule on those closed candles, at an 85% payout. |
|---|---|
| Rule tested | The rule on closed candles, the option opening at the close of the signal candle and lasting 5 minutes: Higher on a bullish candle (close above open) that the upper band crosses (the band lies between its low and its high), Lower on a bearish candle that the lower band crosses. Bollinger Bands (20, 2) as the platform draws them. The box lists 1-minute candles first, then 5-minute candles and the variants. |
| Signals | BB(20,2), 1-minute candles, 5-minute trade: 255 signals (105 Higher, 150 Lower) BB(20,2), 5-minute candles, 5-minute trade: 217 signals (71 Higher, 146 Lower) BB(20,2), 5-minute candles, band inside the body: 141 signals (50 Higher, 91 Lower) BB(14,2), 5-minute candles, 5-minute trade: 262 signals (97 Higher, 165 Lower) |
| Outcomes | BB(20,2), 1-minute candles, 5-minute trade: 143 won, 107 lost, 5 tied; 57.2% of the 250 decided trades won; net +$0.06 per $1 staked at 85% (+$0.09 at 91%) BB(20,2), 5-minute candles, 5-minute trade: 100 won, 112 lost, 5 tied; 47.2% of the 212 decided trades won; net −$0.12 per $1 staked at 85% (−$0.10 at 91%) BB(20,2), 5-minute candles, band inside the body: 67 won, 70 lost, 4 tied; 48.9% of the 137 decided trades won; net −$0.09 per $1 staked at 85% (−$0.06 at 91%) BB(14,2), 5-minute candles, 5-minute trade: 126 won, 130 lost, 6 tied; 49.2% of the 256 decided trades won; net −$0.09 per $1 staked at 85% (−$0.06 at 91%) |
| Break-even | At an 85% payout a trade needs to win more than 54.1% of its decided trades to break even (1 ÷ 1.85); at 91%, more than 52.4% (1 ÷ 1.91). |
A replay is only a look back at candles recorded on the dates above: it placed no real orders, covers about four and a half days of one pair, and counts overlapping trades as if they were independent. A short test proves nothing about the future, and no profit and no win rate is promised here. IQ Option’s own blog on backtesting says that most strategies need dozens, and often hundreds, of trades before a result means anything.
The two candle sizes give different pictures. On 1-minute candles the trades won 57.2% of the decided trades (143 of 250), with a 95% interval of 51% to 63%, which includes the 54.1% needed to break even. On 5-minute candles they won 47.2% (100 of 212), 48.9% when the band had to cross the body, and 49.2% with the platform’s period of 14. The strategy treats the two sizes as the same with the same 5-minute trade; our recording does not. With one-minute candles the trades overlap, because a signal on one candle is often followed by another within the 5 minutes, so the real margin of error is wider than the interval shown.
What about money management?
The strategy comes with a staking plan: 3% of the account balance on each trade, the return added to the next stake after a win, and a stop when a target profit is reached. This page tests only the entry rule; it did not test those staking rules, and a fixed fraction of the balance does not change whether the entry wins or loses.
Pros and Cons of candle colours with Bollinger Bands
| Pros | Cons |
|---|---|
| Easy to see: a band, a candle and its colour. | The colour of one candle says little: a bullish candle that touches the upper band is often just the end of a short run. |
| A clear entry candle and a fixed 5-minute trade. | On 5-minute candles the rule won 47.2% in our recording, and on 1-minute candles the 57.2% is within the margin of error. |
| Works with the platform’s own indicator; nothing to install. | News and volatility can affect it and may give false signals. |
Common mistakes
- Keeping the platform’s period of 14. The strategy, and the numbers here, use a period of 20.
- Entering before the candle closes. The candle’s colour can change until it closes; the rule uses the closed candle.
- Opening two or more positions on one candle. The strategy warns against it.
- Trading when the bands are very wide. Avoid news and fast moves, when the bands widen unnaturally.
- Taking the 57.2% as proof. It is a result on 25 hours of one pair; its interval reaches down to 51%.
Related guides
- Bollinger Bands on IQ Option and the BB1 strategy
- Pin bars with Bollinger Bands and Bollinger Bands with support and resistance
- Trading candles on IQ Option
- All indicator guides and all strategy guides
Frequently Asked Questions
Q: What is the candle colours strategy with Bollinger Bands?
A: A strategy that reads the colour of the candle that a Bollinger Band crosses: the upper band crossing a bullish candle is a Higher signal, the lower band crossing a bearish candle is a Lower signal.
Q: What are the Bollinger Bands settings?
A: A period of 20 and a deviation of 2. The platform opens the indicator with a period of 14, so change it in the dialog.
Q: How long should the trade last?
A: 5 minutes, on 1-minute and on 5-minute candles.
Q: Which candle colours does IQ Option use?
A: Bullish candles, where the close is above the open, are green; bearish candles, where the close is below the open, are red.
Q: Does the strategy win?
A: On 1-minute candles the 5-minute trades won 57.2% of 250 decided trades in our replay, within the margin of error of the 54.1% needed to break even at an 85% payout. On 5-minute candles they won 47.2% of 212.
Q: Can I use it on 5-minute candles?
A: Yes, with the same 5-minute trade. In our replay the 5-minute candles did worse than the 1-minute candles.
