The Bollinger Band

[padutrader]

Observations:

1. In 2008 he took the exact same bath as the market. You would think he could have done better, just like in 2002, when his loss was half of the market's.
2. In the last 10 years his return was 90%, as compared to the market's 130%. That is quite a big difference.
3. At least he has longevity and one of the few who doesn't just teach but plays too.

i think i should teach him how to use his bands....after 60 years of practice he still uses his bands badly

 

[AndersenBands]

i think i should teach him how to use his bands....after 60 years of practice he still uses his bands badly

Perhaps the risk adjusted returns tell a different story than absolute returns....

 

[padutrader]

Perhaps the risk adjusted returns tell a different story than absolute returns....

Fantastic point..

we do not know his objectives maybe his objective was to beat the bank fixed deposit rate

 

[Jeffro72]

How can traditional BB work when the underlying MA has a positive group delay (ie lag), and a fixed lookback window? I don't use BB, but at least people should calculate them using some of the newer adaptive or near-zero lag MAs.

^This. And it has to be done just right too. And can't be the only "indicators" being used. And a few other things.

 

[padutrader]

BB is not used it is misused and misunderstood.
Bb gives information about the volatility .if volatility is contracting the bands will contract.
if volatility is expanding, Bb will expand.
Should you buy when volatility is contracting?
should you sell when Volatility is contracting?
these are the questions you should be asking.
they will say buy the lower band, do they tell you why? backtest and you will see that works some percentage of the time.
but does it make sense in terms of volatility, which is what you are using BB for?

this is why i am not a great fan of backtesting:

if BB has contracted, it has warned you that there is some slowing down. It may slow down more or it may pick up and continue in any direction up or down.
is volatility directional?

 

[birdman]

What platform are you using? Depending on what it is I will share.

Hey Jon, is there a way to add AndersenBands to TOS? Thanks in advance!

 

[AndersenBands]

Hey Jon, is there a way to add AndersenBands to TOS? Thanks in advance!

Hi Birdman, I may be able to help you with this. Please send me a dm. Thx!

 

[Onyx]

Does anyone have BB statistics win/loss % from using them and also a variation of settings used ?

 

[1a2b3cppp]

I am very interested in using bollinger bands. How do you feel about this thread? https://www.elitetrader.com/et/threads/making-bollinger-band-fading-profitable.266426/

 

[1a2b3cppp]

For the YM, buy and then buy 2 10 points away and then by 3 10 more points away and close whole position at 30 points away. Being right often would be nice considering that's a $500 loss all the times you're incorrect.