band_based picks one indicator for the long stop and another for
the short stop. The most common case is Bollinger lower band for
longs and Bollinger upper band for shorts.
Shape
"stop_loss": {
"type": "band_based",
"long_stop": "bb_lower",
"short_stop": "bb_upper"
}Params
- long stop - indicator column for long-side stop price.
- short stop - indicator column for short-side stop price.
Usage
Common for mean-reversion strategies where the bands are already part of the entry logic. The exit stays consistent with the entry thesis.
Pitfalls
- Bands move every bar. The stop value is captured at entry; it doesn't follow the band. For a trailing variant, combine with trailing_stop.
- Tight bands = tight stops that get shaken out in normal noise.