BollingerBands

[docvijay4u]

Hi,

I Regulary Visit This Thread, Thanks To All Friends For Sharing Knowledge. I Have Little Query Regarding Bollinger Band.

- I See That When BB Are Wide Open There Is Much More Scope For Price To Move Up Or Down. But When They Contract There Is Less Scope For Price To Move.
- When BB Are Widely Open We Can See SMA Crossover & Their Continuation Very Clearly. But When They Are Contracted, SMA Crossover Take Multiple Reversal Or They Are In Lap Of Each Other.
- Even Worse When Contracted BB Breakout We Might See Trade Is Going Badly Against Us(If Still Holding Previous Position). And Running To Take Advantage Of Breakout.

My Quries Are:-

If We Are Holding Our Position Say Long In Morning Session After SMA Crossover. Then In Early Afternoon Session We Enter Into Contracted Zone, There Is Always Fear What Will Happen Next. If Breakout Happens Which Way It Will Go.

What Should We Do?
- Close Our Previous Position In Contracted Zone?
- Waiting For Breakout To Take Fresh Position ?
- Is It Wise To Trade In Contracted Zone?
- Or Continue Our Position And Take Emergency Decision After BreakOut? i.e. If Trade Is Along With Us Then Stay Tuned And If It's Against Exit And Take Reverse Trade.

Thanks.

 

[SavantGarde]

Hi Doc,

Good Queries For Newbies.....

a) If The Bands Have Contracted, It Is Because Of Very Narrow Range, Same Is Reflected In Crossover Not Being Clear

b) If The Bands or The Crossover Is In Very Narrow Range Then It Will Breakout On Either Side.

c) Your Point Where You Have Shown On The Chart Towards The End Of Narrow Range You Have A Clear Bullish Crossover, That My Friend Is The Point To Enter Long.

Don't Worry, It Will Take Many Days Of Observing The Chart, When You Will Eventually Gain Confidence.

There Are Couple Of More Things To Add To The Chart, Will Tell You All Once You Have Gained Confidence With These Basics

You Have The Basic Fundas Correct

Happy & Safer Trading

SavantGarde

 

[columbus]

Hi Doc,

Good Queries For Newbies.....

a) If The Bands Have Contracted, It Is Because Of Very Narrow Range, Same Is Reflected In Crossover Not Being Clear

b) If The Bands or The Crossover Is In Very Narrow Range Then It Will Breakout On Either Side.

c) Your Point Where You Have Shown On The Chart Towards The End Of Narrow Range You Have A Clear Bullish Crossover, That My Friend Is The Point To Enter Long.

Don't Worry, It Will Take Many Days Of Observing The Chart, When You Will Eventually Gain Confidence.

There Are Couple Of More Things To Add To The Chart, Will Tell You All Once You Have Gained Confidence With These Basics

You Have The Basic Fundas Correct

Happy & Safer Trading

SavantGarde

Hi docvijay,

Whenever there is breakout in EITHER direction ,the bands will expand.
It will touch top band if it is POSITIVE and touch bottom band
if it is NEGATIVE.

 

[Ajax]

Just one observation with BB

Many times there are false moves following contracting BB
Just like a heavy vehicle moves a little bit back (to break the inertia)
and then surges ahead full throttle :thumb:

Savant, How do you manage that

 

[ManishKumt]

Nice system but use it with large movement script's like nifty banknifty, educomp, lt and so many those will give u best result otherwise u will get only pennut's

thanks
regards
manish kumar

 

[SavantGarde]

Hi Ajax,

Stock Futures, NF & BNF Is Only Positional No Intraday.

On Forex, Movement Is Different & Is Additionally Overlayed Besides ZZ & Other Stuff That You Have Seen With 'Heiken Ashi' Which Has Been Modified By A Friend But Personally I Don't Know Much About Heiken Ashi, Will Have To Study It In Detail.....But It Works.....

Besides...... That BB Is Just A Secondary Indicator For Me...Which Wakes Me Up On Certain Type Of Behavious & Keeps Me On Toes, I Can Never Imagine Myself Using It As A Primary Indicator, Unless & Until I Learn More About It.

Happy & Safer Trading

SavantGarde

Just one observation with BB

Many times there are false moves following contracting BB
Just like a heavy vehicle moves a little bit back (to break the inertia)
and then surges ahead full throttle :thumb:

Savant, How do you manage that

 

[rajendrani]

I had to rush back to some work, was not able to complete the charts till the end of the trading session, will try some day to post live charts and it goes, taking volume and other BB(20,2) into consideration. and also the sma cross overs 4 and 5

Thanks and regards,
rajendrani

 

[rajendrani]

Hi Ajax,

Stock Futures, NF & BNF Is Only Positional No Intraday.

On Forex, Movement Is Different & Is Additionally Overlayed Besides ZZ & Other Stuff That You Have Seen With 'Heiken Ashi' Which Has Been Modified By A Friend But Personally I Don't Know Much About Heiken Ashi, Will Have To Study It In Detail.....But It Works.....

Besides...... That BB Is Just A Secondary Indicator For Me...Which Wakes Me Up On Certain Type Of Behavious & Keeps Me On Toes, I Can Never Imagine Myself Using It As A Primary Indicator, Unless & Until I Learn More About It.

Happy & Safer Trading

SavantGarde

Savant sir, can we plot sma may be of 5 for high and low, that actually give a smooth curve and can decide on the trend in intraday or may be sma of 7 or 9, please help what would be the best one to go fo it.

At present I am not able to post the image, but will post it soon, so that I am able to convey my message clearly.

But if you get time to plot the sma for high and low for a particular period, then you will get to know, what I am trying to ask you.

Thanks and regards,
rajendrani

 

[bijoy2526]

savantgarde ji..hiii i m from Bhilai..i m really interested with this bollingers band..i never trade without this on my chart..drawing trendlines on the chart of course indicate in which direction stock price is suppose to move.one can wait for breakout or breakdown of trend lines to know in which direction price is suppose to move.likeiwise he can go short or long.i think i m right.brother can u explain some instances by drawing trendlines inside the bollinger band..and how pricemovemen takes place after that.one queston in the first 30 minutes of trading i am unable to get TF of 5 minutes in share tiger..i only depend on timeframe of 3 minutes.can u plz explain how to trade during those time..BIJOY

 

[columbus]

Hi Ajax,

Stock Futures, NF & BNF Is Only Positional No Intraday.

On Forex, Movement Is Different & Is Additionally Overlayed Besides ZZ & Other Stuff That You Have Seen With 'Heiken Ashi' Which Has Been Modified By A Friend But Personally I Don't Know Much About Heiken Ashi, Will Have To Study It In Detail.....But It Works.....

Besides...... That BB Is Just A Secondary Indicator For Me...Which Wakes Me Up On Certain Type Of Behavious & Keeps Me On Toes, I Can Never Imagine Myself Using It As A Primary Indicator, Unless & Until I Learn More About It.

Happy & Safer Trading
SavantGarde

Hi Savant,

Thanks for introducing to new INDICATORS. I think HEIKIN ASHI appears
to work FINE for Day traders.I am producing one such chart here.

If anybody is having resources to plot same for last trading day ,
it will be great contribution.(I think it is available in Metastock.)
We will have discussions there after.