BollingerBands

[columbus]

BB(20,2) of nifty futures on time frame 4/6 min are presented below.

Choppy Market:

Go long when Red+Green candles pierce the bottom band and wait for 15minutes
for confirmation after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band and wait for 15minutes
for confirmation after taking position , otherwise come out with stoploss.

Strong Market:

If the candles are concentrated in Top band go Long.
If the candles are concentrated in Bottom band go Short.
The Proximity of candles with respect to Outer boundaries indicates the Strength.
More strength means more closer to Outer boundaries.

 

[columbus]

Columbus,

Whenever I think of BB, I always remember your ever green thread. I feel there should't be a better place than this thread to fire my doubts/apprehensions on BB.

How to tackle the following situations.

Hi Veluri,

Thanks for your kind words.In fact the thread has become popular because of so many your suggestions, queries and recomandations.

1.Suppose I took buy position after RED + GREEN candles piercing bottom BB.
Obviously I took position at the high of Green Candle. I suppose to wait for next 15 min for price action. Price hit my stop loss which is placed below the low of Green candle. Again, the price takes upward move with 15 min and closed above Green candle.

Is there any filter to combat such situations or just think it is our bad luck.

Recently we discussed about stoploss in this method.It should not be too less
or high,based on your risk appetite.To start with an initial stoploss anywhere between 10~15 points is recommanded.Once the bands are formed ,half the width the band
(BBoutTOP-BBoutLOWER)/2.

2. Price grazing the BB either Bottom or TOP. Suppose there is a piercing of
Green + Red cancled top BB. As per rule, we should short. Let us for clarity sake, think we shorted. I have waited for next 15 min. This bar is Green but not as high as earlier one and also not as low as earlier one. That means continuously next few bars are inside bars of First Green bar. The price is not moving any where. Neither it is hitting stop loss nor going down. Is it better to close the position even if it has not hit SL to switch to a better opportunity.

Price Grazing BB top with Green candles or Price Grazing BB lower with Red candles indicate a STRONG market Green+Red or Red+Green indicate a choppy market..
But in the morning we assume a Choppy Market to sart with.
In the doubt raised by you ,it is advisable to close position and wait another opportunity.

I would like to share another example.Few months back I shorted market after
seeing Green+Red candle pair at the top band of BB and it went ok for next 2 candles. suddenly the 3rd candle was a big Green candle.I took risk by adding another Short position after waiting for few minutes.I do not have any control over such situations. One can add to such positions ,maximum couple of time provided ther is enough time for closure of markets.

3. Piercing of bars means main body or even whics?
What I observed is that even whics satisfied the condition of entering into trade. Or do you have any contrary suggestion?


Wicks before taking that form ,were once a solid body attached to main body.
So they carry equal importance with NO contrary suggestion.

 

[columbus]

BB(20,2) of nifty futures on time frame 4/6 min are presented below.

Choppy Market:

Go long when Red+Green candles pierce the bottom band and wait for 15minutes
for confirmation after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band and wait for 15minutes
for confirmation after taking position , otherwise come out with stoploss.

Strong Market:

If the candles are concentrated in Top band go Long.
If the candles are concentrated in Bottom band go Short.
The Proximity of candles with respect to Outer boundaries indicates the Strength.
More strength means more closer to Outer boundaries.

To be frank in the days of choppy markets ,losing 100 points is too much.

 

[columbus]

BB(20,2) of nifty futures on time frame 4/6 min are presented below.

Choppy Market:

Go long when Red+Green candles pierce the bottom band and wait for 15minutes
for confirmation after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band and wait for 15minutes
for confirmation after taking position , otherwise come out with stoploss.

Strong Market:

If the candles are concentrated in Top band go Long.
If the candles are concentrated in Bottom band go Short.
The Proximity of candles with respect to Outer boundaries indicates the Strength.
More strength means more closer to Outer boundaries.

 

[Raghavacc]

Deleted

Regards
Raghav

 

[Raghavacc]

Columbus,

Just a thought. Did you ever happen to trade this method with options? I didn't put my hands in to options so far.My idea is like this.

Example:Ref to the image attached below.

Below is the Nifty 5300 CE. Applying this rule we buy the call when bottom band pierces red +green and sell the CE when top band pierces Green +red.

Alternately we can do the trade 5200PE reversing the above rule..Other things remain same as per original rules posted by you.

Pls leave your opinion.

Regards
Raghav

 

[columbus]

Columbus,

Just a thought. Did you ever happen to trade this method with options? I didn't put my hands in to options so far.My idea is like this.

Example:Ref to the image attached below.

Below is the Nifty 5300 CE. Applying this rule we buy the call when bottom band pierces red +green and sell the CE when top band pierces Green +red.

Alternately we can do the trade 5200PE reversing the above rule..Other things remain same as per original rules posted by you.
ot
Pls leave your opinion.

Regards
Raghav

Hi Raghav,
I never traded in Options though this method can be applied there also
for 2 reasons.
1.The kind of volatility seen in Futures is missing and this method is
successful if there is good volatility.
2.With options you tend to overtrade simply there are cheap.I try to
avoid over trading.

 

[columbus]

BB(20,2) of nifty futures on time frame 4/6 min are presented below.

Choppy Market:

Go long when Red+Green candles pierce the bottom band and wait for 15minutes
for confirmation after taking position, otherwise come out with stoploss.
Go short when Green+Red candles pierce the top band and wait for 15minutes
for confirmation after taking position , otherwise come out with stoploss.

Strong Market:

If the candles are concentrated in Top band go Long.
If the candles are concentrated in Bottom band go Short.
The Proximity of candles with respect to Outer boundaries indicates the Strength.
More strength means more closer to Outer boundaries.

 

[saivenkat]

BUY BUY BUY GOLDINFRA @ 32.6 T 40-45 Reason: Diversified into Solar cells attracting huge TAX Exemptions, earning tremendous Net-Profits. SAT in favour of Open Offer Price

Dear sharateesh,

Please please avoid giving your calls in this thread. Normally in this forum, no one gives their call in other persons thread. May be you could see charts posted with their doubts raised about a particular stock.. or something like that..

If your interested in giving calls for the benefit of traderji members please start a new thread on your own, and give it there, with the fundamentals or technical reasons behind it. I hope that you will not find me different for saying so.

Cheers,:thumb:

 

[murthymsr]

Dear Columbus,

I have been following your thread, though silently!

Your regular posts have for sure improved my knowledge on BB. BB and RSI are great tools as they have the prefixed boundary values like 0 and 100 and one get some clue on the reversal. (unlike indicators like MACD.)

Thanks for all your posts in this thread.

And lastly, on your recent signature: (on lighter side, though !!!)

A candle .......... candle.

I am sure, you just mean the opposite !

Regards.