BollingerBands

[columbus]

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

(It seems the Avg(S,20) line on 4-min TF is wrongly plotted because this line never intersects the Bollinger Bands.)

As rightly pointed out ,the role of volumes should not underestimated.
On 22/4/10 ,we have such strong volume bars at 1115,1330 and 1530.
And the periods were either saw peaks or troughs.

 

[columbus]

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

1.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.

In case of Verital rise or Vertical fall ,the above rules may not work and have close
look at the central line and outer boundaries always.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.

2.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.

Avoid trading when the Bollinger Band is narrow.

We had just 36 point range ,another Narrow Range day .

 

[columbus]

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

1.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.

In case of Verital rise or Vertical fall ,the above rules may not work and 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.

2.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.

Avoid trading when the Bollinger Band is narrow.

Another Narrow Range and Volatile day with just 30 points.

 

[munnabhai208]

Sir,
Today is NR7...That too narrowest in last some NR days .So we can expect range break tomorrow.

 

[columbus]

Sir,
Today is NR7...That too narrowest in last some NR days .So we can expect range break tomorrow.

Hi munnabhai208,

Whether NR day or not ,we trade like any other choppy day and if we lucky
it will turn out to be Break-Out day.

 

[Raghavacc]

Few observations that I notice.

Previously I have told that the tail of a candle too is of importance and it was clearly visible today.

Whenever the upper band pierces the upper/lower ( Mainly shooting star /hammer) tail of either green or red candle it conveys some message. In the attached chart of TATAMOTORS the first arrow where the band pierced the upper tail of green candle gave a scalping opportunity.

The second arrow points at a red candle where the band pierces the upper tail It turns out to be a message towards upcoming crash.The candle in question has a big volume and its a indication that the upper close was rejected by majority..Just observe next few candle .no reaction from bulls. Any one can guess whats going to happen next.

One more example :

Here in ICICI first the band pierced green and then after 2 candles pierced red one. In between there was a small shooting star and the volume was heavy.Again next few candles were of down closes confirmed that bulls have lost the battle.One way traffic after wards.Similar case in Nifty as well.

the charts here are of 3 minutes and my personal opinion is that when we are in tight range smallest tf charts convey some messages for the upcoming big events.

Last candle ( 2nd arrow)was a big candle with huge tail pierced by upper candle. Hence can we see gap down tommorrow?Lets wait.

believe me today was the first occasion when I lost a trade in last 3 months strictly following this method.Otherwise 20% of trades were break even and other 80% were winners.Point to note is that I do not take marginal trades i.e: when in doubt on the signal part I do not enter.

I love this method for these reasons.

1.Its the simplest method to follow. Even a kid can understand.
2.Stoploss is very nearby.Risk is minimized.
3.We can trade this method both on trending and range bound day .
4.Most importantly major reversals at both top and bottom can be identified instantly.Example todays Bharti chart

5.On a trending day question of exit is important .Unless we get clear understanding of the dynamics of market even small pullbacks look like reversals.So differentiating pullbacks and reversals is of utmost importance.The Same is answered by BB either in the top or at the bottom.

Credit goes to Columbus for bringing out the hidden gems.




Regards
Raghav

 

[Raghavacc]

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

1.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.

In case of Verital rise or Vertical fall ,the above rules may not work and 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.

2.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.

Avoid trading when the Bollinger Band is narrow.

Another Narrow Range and Volatile day with just 30 points.

Hi Columbus,

You have earlier mentioned about making use of StochasticRSI. Whenever you get time Can you pls post some traded charts with examples.Interested to know your version of trade using StochasticRSI and the rules thereof.

Regards
Raghav

 

[columbus]

I love this method for these reasons.

1.Its the simplest method to follow. Even a kid can understand.
2.Stoploss is very nearby.Risk is minimized.
3.We can trade this method both on trending and range bound day .
4.Most importantly major reversals at both top and bottom can be identified instantly.Example todays Bharti chart
5.On a trending day question of exit is important .Unless we get clear understanding of the dynamics of market even small pullbacks look like reversals.So differentiating pullbacks and reversals is of utmost importance.The Same is answered by BB either in the top or at the bottom.

Regards
Raghav

Hi Rahav,

Nice to hear the good words.Good charts too.

Bollinger method is very simple method indeed,I spent lot of time in
searching for other indicators prior to that.Many people have contributed
toward its developement including yours here, at traderji.


In your post I missed about BAND BARS.Band bars are nothing but
volume bars that pierce both bands.Band Bars often indicate closer of
position or opening new positions.The band bars of earlier period may be
dwarfed by Band Bars of end of day.

 

[columbus]

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

1.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.

In case of Verital rise or Vertical fall ,the above rules may not work and 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.

2.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.

Avoid trading when the Bollinger Band is narrow.

 

[Raghavacc]

Hi Rahav,

Nice to hear the good words.Good charts too.

Bollinger method is very simple method indeed,I spent lot of time in
searching for other indicators prior to that.Many people have contributed
toward its developement including yours here, at traderji.


In your post I missed about BAND BARS.Band bars are nothing but
volume bars that pierce both bands.Band Bars often indicate closer of
position or opening new positions.The band bars of earlier period may be
dwarfed by Band Bars of end of day.

Columbus,

I did notice those BAND BARS in the 6 Minutes charts posted by you. However I have little understanding of those BAND BARS.

Appreciate if you keep me posted on the settings for BAND BARS in Trade Tiger. I tried but in vain.

Regards
Raghav