Timing the market with Bollinger Bands

[yvberj]

Quote from zorrosg:

Excellent article, which suggests a good solution to trying to judge whether the price is going to reverse near the BB limits or carry on riding up the BBs.

The article says that the occurence of an inside day price pattern when the price is near the BB limits will suggest a likely reversal of the price. Anyone with experience trading this way can tell us whether this method works most of the time?

Another point to add to this concept is volume. When price touchs the BB and the next bar is an inside bar volume should also be less. I've found that you may sometimes have a couple of inside bars before you see a change of direction.

Alex

 

[acronym]

Maybe im mad, but volume doesnt apply the same across markets.
The respective TIMING involved should be significant, in commodities rollover periods, its just as likely to be meaningless in equities.

Inside days(and combinations of, plus variables) are best used as filters, but it depends on the divergence your looking at.

 

[yvberj]

Quote from acronym:

Maybe im mad, but volume doesn't apply the same across markets.

I certainly cannot speak for all markets since I don't have that expertise. However, I can tell you that, generally, when you have a trending market with good volume and then you get an inside candle with lower volume that, to me, shows indecision at that point. That indecision may lead to some sort of change.

Remember, we are working with "indications". Each move up, down or sideways is an indication of what may come. There are no absolutes in this business.

Alex