Bollinger Bands

[coyotte]

Check out BLD daily with these setting -- notice what is happening when the lower band is breached .
As Bollinger states when the SP hits the 20 ma , thats the median price -- according to Bollinger SP will always gravitate to this MA, as with most methods it is not suitable for all stocks though -- but if you find a stock it works with, then it can be a powerful indicator .

I know it,s a lagging indicator and blah , blah, blah --- but contary to a lot of opinions on this forum it only shows imo that different stocks are traded with different methods and one of the keys is to find that


Cheers

 

[It's Snake Pliskin]

tekman,
give me some credit mate. The gate is used to keep knuckle heads out.

Snake,
Its 4-pages long and written in 2001. I can post the start of it when I get some time.

Thanks Nick, it is much appreciated. We know you are busy and anything you post is appreciated by many.

regards
Snake

 

[It's Snake Pliskin]

Check out BLD daily with these setting -- notice what is happening when the lower band is breached .
As Bollinger states when the SP hits the 20 ma , thats the median price -- according to Bollinger SP will always gravitate to this MA, as with most methods it is not suitable for all stocks though -- but if you find a stock it works with, then it can be a powerful indicator .

I know it,s a lagging indicator and blah , blah, blah --- but contary to a lot of opinions on this forum it only shows imo that different stocks are traded with different methods and one of the keys is to find that


Cheers

Coyotte,

I see what you mean regarding finding what works with a stock or market's character. I have noticed some signals using bollingers that could enhance my entries. Nicks strategy is totally different to what I am looking at but it is interesting for longer term holdings.

Regarding BLD:
If you look at the 27th of Oct to the 3rd of Nov: buy and sell signals using price action and volume. Note the volume and price divergence. The rabbit MACD indicator is still tanking to the south pole. Beyond the 3rd, price is consolidating. (hindsight yes)

Snake

 

[stevo]

I use Nick's approach for entries combined with volume and momentum.

On weekly charts, a close above the top bollinger band can trigger a buy signal. Testing on weekly timeframes with ASX stocks shows that this approach combined with a suitable exit easily outperforms the traditional overbought / oversold approach.

Plot some weekly charts with a 20 period 1.5 SD bollinger band (or similar parameters) to get a feel for it. Trail a stop and you have the start of a trading system - see below. Note - I don't trade the system shown.



I posted this on my blog also - www.drawdown.blogspot.com
Stevo

 

[It's Snake Pliskin]

Nick,

The long entry will be a close OUTSIDE the upper band. Once the market closes outside, we simply buy on the next open.

A simple entry and a robust system. Reading this post of yours has helped me think about something clearly.

Snake :bounce:

 

[It's Snake Pliskin]

I use Nick's approach for entries combined with volume and momentum.

On weekly charts, a close above the top bollinger band can trigger a buy signal. Testing on weekly timeframes with ASX stocks shows that this approach combined with a suitable exit easily outperforms the traditional overbought / oversold approach.

Plot some weekly charts with a 20 period 1.5 SD bollinger band (or similar parameters) to get a feel for it. Trail a stop and you have the start of a trading system - see below. Note - I don't trade the system shown.



I posted this on my blog also - www.drawdown.blogspot.com
Stevo

Stevo,

Your post has contributed to my clear thoughts too.
Snake:bounce:

 

[tech/a]

Stevo.

That stop the RED line on your chart.
What is it?

It doesnt appear to trigger from a cross, is it triggered from a downturn??

 

[stevo]

Tech
The exit is triggered only if the close is below the line, not the low.

The line is just a lowest low style stop - LLV( L, 2) or something similar. I ratchet it up only and have to check if it has been crossed using C< ref(stop, -1) or something like that. If you just use LLV(L, 2) then the line drops when there is a lower low, but I don't allow the stop to drop unless the close breatches it.

Hope that makes sense. I can post the AB code if you want. I am not trading with this style of stop.

Stevo

 

[professor_frink]

stevo,
A little while ago I was trying to do something similar, but couldn't quite get it to work- would love for you to post the code(if the offer extends to others of course )

 

[wavepicker]

Have looked at BB's in detail before. IMO a complete waste of time. The upper and lower bands that are calculated "x" Std deviations from a MA are useless because the MA itself is lagging the price data by half the span of the average. That is why the price data hugs or even penetrates the upper or lower band for long periods of time. What type of overbought/oversold measure is this?? In many instances completely useless. Only price is king.

The only way to use BB's succesfully IMO is by modifying them such that the MA selected is in phase with the price data. This means finding the dominant cycle first and then plotting the MA correctly on the chart.

Cheers

 

[stevo]

professor,
A little off topic but it could be teamed with a bollinger breakout strategy.

StopLB = Param( "StopLB", 3, 1, 10, 1);

RawExit = LLV( L, StopLB) ; 

// Lowest low STOP - Racheted
initial= RawExit;
stop[0] = Close[0];
for( i = 1 ; i < BarCount; i++)
{ 
 if( Close[i] > stop[i-1]) 
 { 
  stop[i] = Max( initial[i], stop[i-1] ); 
 }
 else { stop[i] = initial[i]; }
}
Plot(stop, "LLV Stop", 4, 1);

I am not using this exit strategy in live trading at the moment, just doing some testing. Use at your own risk. You can also vary the code to make an ATR trailing stop.

 

[professor_frink]

Cheers stevo.
Appreciate it