BollingerBands

[SavantGarde]

Hi Ash.Paul,

Ok Your BB Settings Give You Wider Price Range...Therefore Much Safer.

I Would Like Add A Point Here Though For Your Settings, If The First Bar Piercing The Upper BB Is Where You Enter, Only Thing To Be Careful Is That The High Of The Next Bar Is Not Higher Than Your Entry Bar, Similarly For The Lower BB,
Reason Being Usually Piercing Of Upper BB Followed By Higher High On Subsequent Bar Is Usually An Expansion Breakout On Higher TF & Similarly Breakdown For Lower BB, If Subsequent Bar Is Form A Lower Low Than Your Entry Bar.

Happy & Safe Trading

SavantGarde

For intraday swing scalping, I found this strategy quite successful.
I use Bollinger bands with 22 SMA with 3 standard deviation.
I also add a 5 period LWMA(linear weighted moving average).
timeframe: 15min ; chart type: candlesticks

Method: Very simple strategy, I wait for prices to touch the 3rd deviation for entry on either side and would exit when candles touches the 5lwma. Like all other strategies it isn't a holy grail so I do get some losses, so to manage risk I keep a stoploss few ticks away from the low of the entry candle( the candle which has actually touched the 3rd deviation.
Note: 1.Few ticks in my case is 1% away from low of the entry candle, example low is 1000 then 990 for a long position and 1010 for short position, so you decide the position size accordingly.
2. I dont even bother to look at bands which are too squeezed or are contracting because there is high chance of whipshaws as prices may just break out of the band and probably not touching our 5 lwma, bear in mind 5lwma is soo fast that it follows the prices very quickly and considering 5lwma as our exit it will more likely exceed our entry point in negetive. This startegy works on a nice volatile period and usually that time bands tend to look parallel and thats what makes this strategy more sucessful.
3. Exits startegy is the touch of 5lwma but with the confirmation of price action you can let the profits run which I may explain later.

In the above example I have shorted ACC in cash market
I have kept a stoploss at 650.50.

 

[columbus]

For intraday swing scalping, I found this strategy quite successful.
I use Bollinger bands with 22 SMA with 3 standard deviation.
I also add a 5 period LWMA(linear weighted moving average).
timeframe: 15min ; chart type: candlesticks

Method: Very simple strategy, I wait for prices to touch the 3rd deviation for entry on either side and would exit when candles touches the 5lwma. Like all other strategies it isn't a holy grail so I do get some losses, so to manage risk I keep a stoploss few ticks away from the low of the entry candle( the candle which has actually touched the 3rd deviation.
Note: 1.Few ticks in my case is 1% away from low of the entry candle, example low is 1000 then 990 for a long position and 1010 for short position, so you decide the position size accordingly.
2. I dont even bother to look at bands which are too squeezed or are contracting because there is high chance of whipshaws as prices may just break out of the band and probably not touching our 5 lwma, bear in mind 5lwma is soo fast that it follows the prices very quickly and considering 5lwma as our exit it will more likely exceed our entry point in negetive. This startegy works on a nice volatile period and usually that time bands tend to look parallel and thats what makes this strategy more sucessful.
3. Exits startegy is the touch of 5lwma but with the confirmation of price action you can let the profits run which I may explain later.

In the above example I have shorted ACC in cash market
I have kept a stoploss at 650.50.

Thanks ,for sharing your strategy.Will it be the same for FUTURES also?
For scalping trades in futures you can as well try BB (9,2)to start with.
The standard deviation can be changed accordingly since the bands are
very narrow.

 

[SavantGarde]

Columbus,

Keeping A Wider Deviation Will Create A Wider Price Range Where Ash.Paul Still Has The The Price Piercing A Few Times, It Probably Suits His Pace & Therefore Is Comfortable, I Think It Is A Good Sound Stategy If You Want To Relax & Trade.

Happy & afe Trading

SavantGarde

Thanks ,for sharing your strategy.Will it be the same for FUTURES also?
For scalping trades in futures you can as well try BB (9,2)to start with.
The standard deviation can be changed accordingly since the bands are
very narrow.

 

[columbus]

Columbus,

Keeping A Wider Deviation Will Create A Wider Price Range Where Ash.Paul Still Has The The Price Piercing A Few Times, It Probably Suits His Pace & Therefore Is Comfortable, I Think It Is A Good Sound Stategy If You Want To Relax & Trade.

Happy & afe Trading

SavantGarde

Savant,

The moving average (9~25) and Standard deviation (1.5~3) in BB depends
on the individual, based on RISK appetite and nature of holding.In fact ,
tweaking the values and visiting different time frames often help.

 

[ash.paul]

Hi Ash.Paul,

Ok Your BB Settings Give You Wider Price Range...Therefore Much Safer.

I Would Like Add A Point Here Though For Your Settings, If The First Bar Piercing The Upper BB Is Where You Enter, Only Thing To Be Careful Is That The High Of The Next Bar Is Not Higher Than Your Entry Bar, Similarly For The Lower BB,
Reason Being Usually Piercing Of Upper BB Followed By Higher High On Subsequent Bar Is Usually An Expansion Breakout On Higher TF & Similarly Breakdown For Lower BB, If Subsequent Bar Is Form A Lower Low Than Your Entry Bar.

Happy & Safe Trading

SavantGarde

Thanks for the info. I agree with you thats why I keep a stop loss above the entry bar, in case the following second or third bar doesnot touch the 5ma instead the trade starts to against me, i make sure to exit at the close of third bar/candle so no waiting for the stoploss to get hit.
this startegy overall is having a risk:reward ratio of 1:1 so it totally depends upon the traders skill to manage it properly. If managed properly keeping a strict rules and following it in a disciplined manner can provide an edge to any one. The win rate% is quite high so thats an advantage towards moneymanagement.
If any one is willing to backtest it and come up with some results then that would provide more insight to it. Generally I am not a fan of backtesting, I rather forward test to know if it suits my personality.

 

[ash.paul]

Savant,

The moving average (9~25) and Standard deviation (1.5~3) in BB depends
on the individual, based on RISK appetite and nature of holding.In fact ,
tweaking the values and visiting different time frames often help.

I couldn't really grasp your point, can you please explain what did you actually wanted to convey.
I can understand the importance of browsing different TF's as it will provide more clearer picture about the trend, price action on various support and resistances on different TF's for an perfect entry.
Can u plz elaborate, how different BB settings depends upon individual's risk appetite and nature of holding?
Thanks.

 

[columbus]

I couldn't really grasp your point, can you please explain what did you actually wanted to convey.
I can understand the importance of browsing different TF's as it will provide more clearer picture about the trend, price action on various support and resistances on different TF's for an perfect entry.
Can u plz elaborate, how different BB settings depends upon individual's risk appetite and nature of holding?
Thanks.

Bollinger Bands has 2 parameters BB(moving average,Standard deviation).
The Default value is 20,2.
One can change these parameters anything between (9~25,1.5~3.5).
Forex people tend to use lower standard deviations.Am I right?

 

[ash.paul]

Bollinger Bands has 2 parameters BB(moving average,Standard deviation).
The Default value is 20,2.
One can change these parameters anything between (9~25,1.5~3.5).
Forex people tend to use lower standard deviations.Am I right?

Parameters can be anything, you can plot any Moving average not just(9~25), same with deviations it could be any figure as long as it doesnot bounces off the screen. But my question was you to justify your comment, these settings can be adjusted according to your risk appetite and holding period. How?

And people who trade forex dont just use lower deviations, it totally depends upon system to system IMHO. Some use plenty of different BB's with different deviations on a single chart. One such example of a trading system is here http://www.forexfactory.com/showthread.php?p=207155

 

[columbus]

Parameters can be anything, you can plot any Moving average not just(9~25), same with deviations it could be any figure as long as it doesnot bounces off the screen. But my question was you to justify your comment, these settings can be adjusted according to your risk appetite and holding period. How?

And people who trade forex dont just use lower deviations, it totally depends upon system to system IMHO. Some use plenty of different BB's with different deviations on a single chart. One such example of a trading system is herehttp://www.forexfactory.com/showthread.php?p=207155

There are some people who trade with Narrow bands and they are averse
to take RISK.Similarly those trade with very wide band often tend to be
POSITIONAL traders but not daytraders ,since wide bands are seldom HIT.
The below is self-explanatory post containing BB's with different Standard
Deviations.

Source:Internet.

 

[columbus]

EOD charts of BB(20,2) on 3-min TF and BB(9,2) on 5-min TF
are attached.Whenever SIR are in positive we can expect UP
move (SBI,ICICI,Reliance).