Bollinger Band: let's build a strategy together - page 2
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
The book -
--------------
Bollinger on Bollinger Bands Hardcover by John A. Bollinger
Over the past two decades, thousands of veteran traders have come to view Bollinger Bands as the most representative**and reliable**tool for assessing expected price action. Now, in the long-anticipated Bollinger on Bollinger Bands, John Bollinger himself explains how to use this extraordinary technique to effectively compare price and indicator movements.
Traders can look to this techniques-oriented book for hundreds of valuable insights, including:
By understanding how to incorporate Bollinger's techniques into their own investment strategy, investors will greatly increase their ability to ignore often-costly emotions and arrive at rational decisions supported by both the facts and the underlying market environment.
Bollinger Bands 22 Basic Rules
Bollinger Bands were created by John Bollinger, CFA, CMT and published in 1983. They were developed in an effort to create fully-adaptive trading bands. The following rules covering the use of Bollinger Bands were gleaned from the questions users have asked most often and our experience over 25 years with Bollinger Bands.
1. Bollinger Bands provide a relative definition of high and low. By definition price is high at the upper band and low at the lower band.
2. That relative definition can be used to compare price action and indicator action to arrive at rigorous buy and sell decisions.
3. Appropriate indicators can be derived from momentum, volume, sentiment, open interest, inter-market data, etc.
4. If more than one indicator is used the indicators should not be directly related to one another. For example, a momentum indicator might complement a volume indicator successfully, but two momentum indicators aren't better than one.
5. Bollinger Bands can be used in pattern recognition to define/clarify pure price patterns such as "M" tops and "W" bottoms, momentum shifts, etc.
6. Tags of the bands are just that, tags not signals. A tag of the upper Bollinger Band is NOT in-and-of-itself a sell signal. A tag of the lower Bollinger Band is NOT in-and-of-itself a buy signal.
7. In trending markets price can, and does, walk up the upper Bollinger Band and down the lower Bollinger Band.
8. Closes outside the Bollinger Bands are initially continuation signals, not reversal signals. (This has been the basis for many successful volatility breakout systems.)
9. The default parameters of 20 periods for the moving average and standard deviation calculations, and two standard deviations for the width of the bands are just that, defaults. The actual parameters needed for any given market/task may be different.
10. The average deployed as the middle Bollinger Band should not be the best one for crossovers. Rather, it should be descriptive of the intermediate-term trend.
11. For consistent price containment: If the average is lengthened the number of standard deviations needs to be increased; from 2 at 20 periods, to 2.1 at 50 periods. Likewise, if the average is shortened the number of standard deviations should be reduced; from 2 at 20 periods, to 1.9 at 10 periods.
12. Traditional Bollinger Bands are based upon a simple moving average. This is because a simple average is used in the standard deviation calculation and we wish to be logically consistent.
13. Exponential Bollinger Bands eliminate sudden changes in the width of the bands caused by large price changes exiting the back of the calculation window. Exponential averages must be used for BOTH the middle band and in the calculation of standard deviation.
14. Make no statistical assumptions based on the use of the standard deviation calculation in the construction of the bands. The distribution of security prices is non-normal and the typical sample size in most deployments of Bollinger Bands is too small for statistical significance. (In practice we typically find 90%, not 95%, of the data inside Bollinger Bands with the default parameters)
15. %b tells us where we are in relation to the Bollinger Bands. The position within the bands is calculated using an adaptation of the formula for Stochastic
16. %b has many uses; among the more important are identification of divergences, pattern recognition and the coding of trading systems using Bollinger Bands.
17. Indicators can be normalized with %b, eliminating fixed thresholds in the process. To do this plot 50-period or longer Bollinger Bands on an indicator and then calculate %b of the indicator.
18. BandWidth tells us how wide the Bollinger Bands are. The raw width is normalized using the middle band. Using the default parameters BandWidth is four times the coefficient of variation.
19. BandWidth has many uses. Its most popular use is to indentify "The Squeeze", but is also useful in identifying trend changes...
20. Bollinger Bands can be used on most financial time series, including equities, indices, foreign exchange, commodities, futures, options and bonds.
21. Bollinger Bands can be used on bars of any length, 5 minutes, one hour, daily, weekly, etc. The key is that the bars must contain enough activity to give a robust picture of the price-formation mechanism at work.
22. Bollinger Bands do not provide continuous advice; rather they help indentify setups where the odds may be in your favor.
****
Forum on trading, automated trading systems and testing trading strategies
Press review
Sergey Golubev, 2019.09.07 06:28
Bollinger Bands® and MACD Trading System (based on the article)
==========
The chart was made on MT5 with standard indicators of Metatrader 5
I am loving this one,
so there is another crazy idea that I was told is an illusion.
I saw the idea being used by another guy.
BB uused to determine support and resistance points in the future
period 24
Shift 3
deviation 3.5
apply to Close
Read Here
Please tell me what you think of it
RSI with BB - indicator for MetaTrader 5
The indicator consists in an RSI and Bollinger bands calculated on it, it also plots arrows when RSI value was out of Bands and came again in Bands.
Bollinger Bands Fills - indicator for MetaTrader 5
Adding the drawing style DRAW_FILLING to the standard Bollinger Bands indicator . The indicator is recommended for manual trading - to visually highlight the indicator area between the boundaries of ' Bands upper ' and ' Bands lower '.
Forum on trading, automated trading systems and testing trading strategies
How to Start with Metatrader 5
Sergey Golubev, 2020.04.15 10:14
Dual Candle-stick Strategy thread
The strategy is related to Bollinger Bands Fills and RSI Fills indicators with template file.
It is going to be converted to the EA I hope.
for information.
Forum on trading, automated trading systems and testing trading strategies
Dual Candle-stick Strategy
Vladimir Karputov, 2020.04.19 07:42
I published a Strategy Advisor: Dual Candlestick Strategy EA:
In the description, I marked some points with gray color - these are the nuances that I noticed during testing, but have not yet included in version 1. Before starting the adviser, I recommend that you FULLY read the entire description (use the built-in translator:
)
Learn how to design a trading system by Bollinger Bands
In the world of trading, there are many tools and methods that we can use in our favor to achieve out trading goals. These tools can be used according to market condition or according to market status.
One of such methods is trading bands. The main concept of trading bands is to trade between two bands buying and selling to benefit from the determined bands. One of these tools is the Bollinger Bands indicator. This indicator is one of the most popular or one of the most commonly used one in the world of technical analysis and trading.