If the price closes outside the bands, there are two readings. Return: the deviation was overdone, the price goes back to the middle – that fits . : the move is only beginning, the price runs along the band – that fits trends. Which reading is right, you only know afterwards.
Along the band
In a strong trend, the price closes at or above the upper band again and again while the middle follows. Anyone who reads every close above the band as the end of the rise is constantly wrong in a trend.
What the exercise counts
Every first close outside the bands is counted. If a close reaches the middle within the next 10 candles, it counts as a return, otherwise as no return. As long as the 10 candles have not been played, the case stays open – the exercise does not look ahead.
The phase decides
Whether a return or a breakout is more likely to follow depends on the market phase, and that is often only clear in hindsight. Aids are the market structure of or the bandwidth. A rule built on this needs an honest with costs.