BollingerBands
- Thread starter columbus
- Start date
Another way of trading bollinger band is to trade using bollinger band bandwitdh indicator
which tracts the difference between two bands at any time. One can trade long or short when bandwith line changes direction and is above 0.1 with STD DEV of 2 SMA of 20 and closing price as input column. Most of the softwares do provide this indicator.
which tracts the difference between two bands at any time. One can trade long or short when bandwith line changes direction and is above 0.1 with STD DEV of 2 SMA of 20 and closing price as input column. Most of the softwares do provide this indicator.
Bollinger Bandwidth = (Top Bollinger Band (20 periods))-Bottom Bollinger Band (20 periods))/ Simple Moving Average Close (20 periods)
A squeeze candidate is identified when the bandwidth is at a six-month low-low value.
When Bollinger Bands are far apart, volatility is high, and when they are close together, it is low. A squeeze is triggered when volatility reaches a six-month low and is identified when Bollinger Bands reach a six-month minimum distance apart
Bollinger suggests that, to determine breakout direction, it is necessary to look to other indicators for confirmation. He suggests using the relative strength index along with one or two volume-based indicators such as the intraday intensity index (developed by David Bostian) or the accumulation/distribution index (developed by Larry William)
A squeeze candidate is identified when the bandwidth is at a six-month low-low value.
When Bollinger Bands are far apart, volatility is high, and when they are close together, it is low. A squeeze is triggered when volatility reaches a six-month low and is identified when Bollinger Bands reach a six-month minimum distance apart
Bollinger suggests that, to determine breakout direction, it is necessary to look to other indicators for confirmation. He suggests using the relative strength index along with one or two volume-based indicators such as the intraday intensity index (developed by David Bostian) or the accumulation/distribution index (developed by Larry William)
BB(20,2) of nifty futures and bank nifty, on time frame 5 min are presented below.
Case1.Choppy Market:
Go long when Red+Green candles pierce the bottom band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position , otherwise come out with stoploss.
In case of Verital rise or Vertical fall ,the above rules may not work & have close
look at the central line and outer boundaries always.Perhaps this may qualify for
case.2. A close of candle outside the bands need not necessarily mean
termination of trend but it be continuation as well. Have patience to keep a watch
on those situations.
Case2.Trending Market:
If the candles are concentrated in Top band ONLY go Long.
If the candles are concentrated in Bottom band ONLY go Short.
Rules of Case.1 do not work here and keep Mid line as stoploss.
The Proximity of candles with respect to Outer boundaries indicates the
Strength. More strength means more closer to Outer boundaries.
Avoid trading when the Bollinger Band is Narrow and Horizontal.Check with
Nifty-Spot chart occasionally.
Case1.Choppy Market:
Go long when Red+Green candles pierce the bottom band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position , otherwise come out with stoploss.
In case of Verital rise or Vertical fall ,the above rules may not work & have close
look at the central line and outer boundaries always.Perhaps this may qualify for
case.2. A close of candle outside the bands need not necessarily mean
termination of trend but it be continuation as well. Have patience to keep a watch
on those situations.
Case2.Trending Market:
If the candles are concentrated in Top band ONLY go Long.
If the candles are concentrated in Bottom band ONLY go Short.
Rules of Case.1 do not work here and keep Mid line as stoploss.
The Proximity of candles with respect to Outer boundaries indicates the
Strength. More strength means more closer to Outer boundaries.
Avoid trading when the Bollinger Band is Narrow and Horizontal.Check with
Nifty-Spot chart occasionally.
BB(20,2) of nifty futures and bank nifty, on time frame 5 min are presented below.
Case1.Choppy Market:
Go long when Red+Green candles pierce the bottom band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position , otherwise come out with stoploss.
In case of Verital rise or Vertical fall ,the above rules may not work & have close
look at the central line and outer boundaries always.Perhaps this may qualify for
case.2. A close of candle outside the bands need not necessarily mean
termination of trend but it be continuation as well. Have patience to keep a watch
on those situations.
Case2.Trending Market:
If the candles are concentrated in Top band ONLY go Long.
If the candles are concentrated in Bottom band ONLY go Short.
Rules of Case.1 do not work here and keep Mid line as stoploss.
The Proximity of candles with respect to Outer boundaries indicates the
Strength. More strength means more closer to Outer boundaries.
Avoid trading when the Bollinger Band is Narrow and Horizontal.Check with
Nifty-Spot chart occasionally.
Case1.Choppy Market:
Go long when Red+Green candles pierce the bottom band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position , otherwise come out with stoploss.
In case of Verital rise or Vertical fall ,the above rules may not work & have close
look at the central line and outer boundaries always.Perhaps this may qualify for
case.2. A close of candle outside the bands need not necessarily mean
termination of trend but it be continuation as well. Have patience to keep a watch
on those situations.
Case2.Trending Market:
If the candles are concentrated in Top band ONLY go Long.
If the candles are concentrated in Bottom band ONLY go Short.
Rules of Case.1 do not work here and keep Mid line as stoploss.
The Proximity of candles with respect to Outer boundaries indicates the
Strength. More strength means more closer to Outer boundaries.
Avoid trading when the Bollinger Band is Narrow and Horizontal.Check with
Nifty-Spot chart occasionally.
Take a trade/position when you believe that you have taken the right decision.. and don't follow anyone idea's, especially the analysts in the TV... And if the your decision is correct.. move with Trailing stop loss.. other words just exit the trade/position without any second thought.
Regards
Saivenkat
Hi Sureyes,
In fact during this week we had 2 or 3 strong SHORT positions indicated by BB.I always follow RSI with BB ,as mentioned by me many times in this thread.
I agree with SAI that watching channels for analyst's report is not good.
Though I have not a stiff target of 10300 but I put a square off trade at
10130.I had a long position at 10099.The index turned oversold at
10115 and saw a maximum only 10122.Had my position exited ,certainly
I would short it.I did not expect such a huge fall.No regrets at all.
In fact during this week we had 2 or 3 strong SHORT positions indicated by BB.I always follow RSI with BB ,as mentioned by me many times in this thread.
I agree with SAI that watching channels for analyst's report is not good.
Though I have not a stiff target of 10300 but I put a square off trade at
10130.I had a long position at 10099.The index turned oversold at
10115 and saw a maximum only 10122.Had my position exited ,certainly
I would short it.I did not expect such a huge fall.No regrets at all.
BB(20,2) of nifty futures and bank nifty, on time frame 5 min are presented below.
Case1.Choppy Market:
Go long when Red+Green candles pierce the bottom band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position , otherwise come out with stoploss.
In case of Verital rise or Vertical fall ,the above rules may not work & have close
look at the central line and outer boundaries always.Perhaps this may qualify for
case.2. A close of candle outside the bands need not necessarily mean
termination of trend but it be continuation as well. Have patience to keep a watch
on those situations.
Case2.Trending Market:
If the candles are concentrated in Top band ONLY go Long.
If the candles are concentrated in Bottom band ONLY go Short.
Rules of Case.1 do not work here and keep Mid line as stoploss.
The Proximity of candles with respect to Outer boundaries indicates the
Strength. More strength means more closer to Outer boundaries.
Avoid trading when the Bollinger Band is Narrow and Horizontal.Check with
Nifty-Spot chart occasionally.
Case1.Choppy Market:
Go long when Red+Green candles pierce the bottom band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band
(Keep case.2 in mind also always) and wait for 15minutes for confirmation
after taking position , otherwise come out with stoploss.
In case of Verital rise or Vertical fall ,the above rules may not work & have close
look at the central line and outer boundaries always.Perhaps this may qualify for
case.2. A close of candle outside the bands need not necessarily mean
termination of trend but it be continuation as well. Have patience to keep a watch
on those situations.
Case2.Trending Market:
If the candles are concentrated in Top band ONLY go Long.
If the candles are concentrated in Bottom band ONLY go Short.
Rules of Case.1 do not work here and keep Mid line as stoploss.
The Proximity of candles with respect to Outer boundaries indicates the
Strength. More strength means more closer to Outer boundaries.
Avoid trading when the Bollinger Band is Narrow and Horizontal.Check with
Nifty-Spot chart occasionally.
| Thread starter | Similar threads | Forum | Replies | Date |
|---|---|---|---|---|
| B | _bollingerbands overlay | AmiBroker | 0 |