Interesting input. I use them in a completely different way. Maybe I should shut my mouth and keep using them. It has been making good/reliable money for me. I might post an equity curve to show what it leads to.
You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
How to Trade Bollinger Bands
- Thread starter riskfreetrading
- Start date
Quote from riskfreetrading:
I would like to ask how ET people trade using bollinger bands?
I read in a book by Bollinger that there is a frenchman (maybe his name is cahen or cohen?) who has found various ways to trade them, but bollinger did not elaborate more. I was not even sure whether bollinger himself makes anymoney with them. He seemed to dodge the issue in the book.
Any opinion?
I use them standard 20 (4 weeks of daily price), 2 standard deviations. You can use them as a sign of reversal or continuation, I use them as a filter along with a few others. You can set bollingers or keltner bands to . (20, .50 ) for scalping.
Behold a well chosen example, here is a chart fading a close above the band for two cherry picked winners. Now I can call it my super razzle dazzle es fader and sell it for a grand.
Attachments
Quote from positiontrade:
Bollinger himself said that bollinger bands didn't work for him. but you can't blame the man for trying to make a buck selling his method.
Well, in his book "Bollinger on Bollinger Bands" he outlines three trading systems that are all pretty interesting and could work depending on your trading style.
I use bollinger bands as part of a volatility breakout system for stock options, and it works pretty well... Just look for the "squeeze" and buy or sell on volume.
Quote from audiocure:
Well, in his book "Bollinger on Bollinger Bands" he outlines three trading systems that are all pretty interesting and could work depending on your trading style.
I use bollinger bands as part of a volatility breakout system for stock options, and it works pretty well... Just look for the "squeeze" and buy or sell on volume.
Do you buy or sell options? When indicate "buy or sell on volume", which volume are you refering to (options volume, stocks volume, etc/volume)? What is the volume criterion you use?
Thanks
one more note on bollinger bands...
a technique he outlines in his book and one that I find very useful is using the bands to define relative highs and lows and looking for reversal patterns.
For example, if a stock falls bellow a previous low but stays within that band, it usually means something quite different than a new low outside of the bands.
a technique he outlines in his book and one that I find very useful is using the bands to define relative highs and lows and looking for reversal patterns.
For example, if a stock falls bellow a previous low but stays within that band, it usually means something quite different than a new low outside of the bands.
Quote from riskfreetrading:
Do you buy or sell options? When indicate "buy or sell on volume", which volume are you refering to (options volume, stocks volume, etc/volume)? What is the volume criterion you use?
Thanks
I usually do all analysis on the underlying security before looking at the option itself. I do take into consideration the amount of contracts floating around, etc., but that isn't where my search begins.
One cool thing about using volatility breakout is that you buy the option when the bands shows low volatility - so there's usually few contracts and they're usually undervalued. I might look at a couple indicators to confirm direction once the breakout occurs, and then wait for the security's volume to pick up. Usually the biggest moves follow periods of very low volatility.
Hope that helps a bit.