Hi all,
Hope all is well and your trading week has been a successful one. I thought I would try to get your ideas on finalising a simple trading strategy I want to share with my readers at beginnertrader, using a custom indicator called the bollinger squeeze.
I lay no claim to programming the indicator, although I am quite familiar with the method. It is a visual representation of a method involving Keltner channels and Bollinger bands. The most common method is whenever a 20 period bollinger bands move inside the 10 period keltner channels, you have a head start that a move is about to happen.
I looked into that theory, and it has some merit, but misses an awful lot of consolidation periods leading up to a big move. So after many months of tweaking timeframes and settings, I found that actually 12 period bollinger bands moving inside 6 period keltner channels on a 1H timeframe is more accurate.
I look at the market as a game (I know it is not a game) of probability, and despite many traders misconceptions, the market moves sideways more than it does up or down. If we can eliminate the sideways periods, and only trade when there is a good chance of a move up or down, we have already improved our odds.
Of course with periods of greater volatility, comes greater chance of being shaken out of an otherwise good trade, but overally the benefits out-weigh the negatives.
SO .. to the point, I trade this indicator, and during blue periods, look for chart pattern breakouts (triangles, pennants, rectangles, wedges etc.) and it has proven successful enough, however I thought I would send it out there to the masses for ideas on picking likely directions and money management tips (the foundation of any good trading system).
Below is the GBPUSD 1H chart as of time of writing, the blue dots let you know when something is about to happen (ignore the histogram for now) and attached is my version of the indicator, the histogram is something I do not use, but I have left it in there anyway for now.
http://img126.imageshack.us/img126/2130/gbpusd25gl.gif
Happy trading!
Akuma99
Hope all is well and your trading week has been a successful one. I thought I would try to get your ideas on finalising a simple trading strategy I want to share with my readers at beginnertrader, using a custom indicator called the bollinger squeeze.
I lay no claim to programming the indicator, although I am quite familiar with the method. It is a visual representation of a method involving Keltner channels and Bollinger bands. The most common method is whenever a 20 period bollinger bands move inside the 10 period keltner channels, you have a head start that a move is about to happen.
I looked into that theory, and it has some merit, but misses an awful lot of consolidation periods leading up to a big move. So after many months of tweaking timeframes and settings, I found that actually 12 period bollinger bands moving inside 6 period keltner channels on a 1H timeframe is more accurate.
I look at the market as a game (I know it is not a game) of probability, and despite many traders misconceptions, the market moves sideways more than it does up or down. If we can eliminate the sideways periods, and only trade when there is a good chance of a move up or down, we have already improved our odds.
Of course with periods of greater volatility, comes greater chance of being shaken out of an otherwise good trade, but overally the benefits out-weigh the negatives.
SO .. to the point, I trade this indicator, and during blue periods, look for chart pattern breakouts (triangles, pennants, rectangles, wedges etc.) and it has proven successful enough, however I thought I would send it out there to the masses for ideas on picking likely directions and money management tips (the foundation of any good trading system).
Below is the GBPUSD 1H chart as of time of writing, the blue dots let you know when something is about to happen (ignore the histogram for now) and attached is my version of the indicator, the histogram is something I do not use, but I have left it in there anyway for now.
http://img126.imageshack.us/img126/2130/gbpusd25gl.gif
Happy trading!
Akuma99
Attached File(s)
Bollinger Squeeze v4.mq4
4 KB
|
1,065 downloads
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Uploaded May 2, 2006 2:28am
You can quit and they won't care, but you will always know.