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Bollinger Band: let's build a strategy together

  • #1
  • First Post: Edited Feb 2, 2018 6:55pm Feb 1, 2018 11:08pm | Edited Feb 2, 2018 6:55pm
In this thread we will build our own Bollinger Band strategy by combining our heads together. Let's discuss:

DISCUSS:
- what do you think is the best way to recognize RANGED and BREAKOUT?
- what other indicators complement the Bollinger Band?
- what is in your experience the best timeframe for Bollinger Band?
- what do you confirm before entry?
- what conditions do you think should be met in the higher timeframe (before entry)?
- what Price Action do you think is best with Bollinger Band? (HnS, M, doji, other)
- what conditions (if/else) for our Bollinger Band strategy do you think could be helpful?
- what are the differences between volatile penetrations of the outer bands, common trend and correction penetrations?
- Please add as many links as possible

CONDITIONS:
- RANGED: buy on lowerband, sell on upperband
- BREAKOUT: buy on upperband, sell on lowerband

RULES:
- only discuss if it's topic related
- be nice to each other!
- be detailed in your arguments!
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  • #2
  • Feb 3, 2018 8:04pm Feb 3, 2018 8:04pm
I learnt a lot from YouTube videos. To discuss this, I will point out my new ideas. What do you think?

- what do you think is the best way to recognize RANGED and BREAKOUT?
confirm with 5 indicators: overbought/oversold MFI, macd, rsi, %b and bandwidth
confirm trend/breakout with bar technique: if candles are creeping on the outerband
- what other indicators complement the Bollinger Band?
MA rainbow to follow the trend. Use slow_MAs for risk.

- what is in your experience the best timeframe for Bollinger Band?
M5 with H1 or H1 with H4.

- what do you confirm before entry?
Trend, breakout and range.
- what conditions do you think should be met in the higher timeframe (before entry)?
Both in same direction, because you should trade in the direction of the main trend
Both timeframes on upper or lowerband is stronger signal.

- what Price Action do you think is best with Bollinger Band? (HnS, M, doji, other)
HnS not so much
M is recommended, especially third leg.
doji is unrecommended. Because market doesn't listen to doji like it used to.

- what conditions (if/else) for our Bollinger Band strategy do you think could be helpful?
if price close (instead of: hit), then trade
if squeeze, wait for confirmation breakout


- what are the differences between volatile penetrations of the outer bands, common trend and correction penetrations?
correction penetration aka small retracement/reversal usually doesn't close above outerband.
common trend: candles usually close above outerband, candles walk along upperband
penetration of outer bands: ?
I still don't know how to deal with this? how to deal with fake breakouts? how to deal with short-walking upwards?

Do you or anyone have tips for my questions?
As the starter of this thread I expect many comments/ideas from you traders in here. I am looking for tips that help us trade better with Bollinger Band. Any tips are welcome.
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  • #3
  • Feb 3, 2018 9:00pm Feb 3, 2018 9:00pm
Hi, back when I was starting to try make my own strategy I was looking at BB bands. Maybe one good way to start is if you or others can share a BB band strategy and describe the "Pros" and "Cons" of the strategy. THe BB strategy I learned originally was from a guy called Vladimir Ribakov, who apparently traded BB bands for many years in institute. You can find him on youtube. He uses MACD divergence to try and predict when price will ride the Bollinger band for 1-2 replications of squeezed Bollinger band range. I don't know the merits of that guy as he seems to just sell software and run a academy group. Kind Regards, tzamo
"Work hard, put in the effort, and follow your dreams..." -Me
  • #4
  • Feb 3, 2018 10:03pm Feb 3, 2018 10:03pm
you may read this first
https://www.bollingerbands.com/

and then give us some examples how you think to apply BB to current PA of a market/instrument
  • #5
  • Mar 21, 2018 10:39am Mar 21, 2018 10:39am
Hi Guys n Gals,

Newbie here with a half decent understanding of the game lol. Have used Bollinger Bands in the past for scalps, when it crosses outside bands with a view to scalping it back to the middle, albeit with mixed results, primarily being over eager and taking trades too early.

So lately I've been playing around with using BB H4 and BB H1, to effectively filter out Trades I don't want to look at. Essentially making sure the BBs over the two timeframes are in order. eg 1 > 2 > 3 > 4 > 5
1) BB High H4 = 1.8
2) BB High H1 = 1.6
3) Price = 1.5
4) BB Low H1 = 1.4
5) BB Low H4 = 1.2
By this I mean to see trades were the Price is correctly located within a cocoon of BBs, plus the BBs are in the correct order, effectively confirming the current direction, and that the level of volatility is within my risk levels. So for example if the BB Low H4 above was at say 1.5, then the order would be 1,2,3,5,4 which I would then stay away from.

I'm complimenting this with a 50 cross of the 4H RSI (14), and Stochastic must also be in a favour of the trades RSI cross direction.

Has anyone any thoughts on using BBs in this manner?

Cheers
Simon
  • #6
  • May 31, 2018 5:26am May 31, 2018 5:26am
Quoting Simyc1
Hi Guys n Gals, Newbie here with a half decent understanding of the game lol. Have used Bollinger Bands in the past for scalps, when it crosses outside bands with a view to scalping it back to the middle, albeit with mixed results, primarily being over eager and taking trades too early. So lately I've been playing around with using BB H4 and BB H1, to effectively filter out Trades I don't want to look at. Essentially making sure the BBs over the two timeframes are in order. eg 1 > 2 > 3 > 4 > 5 1) BB High H4 = 1.8 2) BB High H1 = 1.6 3) Price =...
Thank you for your reply. I understand your suggestion/method. It's a really popular way to trade the bollinger band. I suggest to make the trading more effective by adding a H1 bollinger band on a M5-minute chart. Additional, I suggest to add a donchian band as well. This will filter out trend where price goes thru upper bollinger band.

Also I found that in a trend, price constantly breaks thru BB. When price is volatile in a certain range, then it's a safe bet to trade bounces (classic method). Do you recognize this also?

Also, before entry on/after price hits outer BB, check if volume was high, if so, then I would trade the bounce. If it was the third swing with third high volume bar, in my experience, there is a 85% chance of a big reversal.

Have you noticed that if you add multi-BB with each a different dev ratio, your up/down trade decision will increase?
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  • #7
  • May 31, 2018 5:27am May 31, 2018 5:27am
Attached you will find additional rules how to trade the bollinger band and what to watch out for. What is your opinion about the rules in this pdf file?
Attached File(s)
File Type: pdf cheatsheet-buy.pdf   752 KB | 1,732 downloads
File Type: pdf cheatsheet-sell.pdf   795 KB | 1,389 downloads
File Type: pdf Daily Prediction Method.pdf   295 KB | 1,569 downloads
File Type: pdf Not So Squeezy Trading Manual.pdf   815 KB | 1,567 downloads
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  • #8
  • May 31, 2018 5:30am May 31, 2018 5:30am
Can anyone upload Bollinger band indicators in here? I will test them and post the results.
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  • #9
  • May 31, 2018 5:34am May 31, 2018 5:34am
Attached Image (click to enlarge)
Click to Enlarge Name: DAX.JPG Size: 129 KB


Attached File(s)
File Type: ex4 MA_BBands.ex4   11 KB | 1,233 downloads
  • #10
  • May 31, 2018 6:46am May 31, 2018 6:46am
Quoting michaellobry
{quote} I suggest to make the trading more effective by adding a H1 bollinger band on a M5-minute chart. Additional, I suggest to add a donchian band as well. This will filter out trend where price goes thru upper bollinger band.
Hi Michael, I'm using MT4 so will have to look i to how to add a H1 BB onto a 5min chart. Im guessing theres an EA/Indicator out there somewhere for this.

I think i understand what you mean in that by checking that the price is also within the H1 BB on a 5min chart, this would add strength to the direction price may then go....

NB i'm using the H4 RSI crossover of 50 as my initial trigger to even look at a trade, then applying the BBs to it.

I'll have to do some research into Donchian Bands they are totally new to me. As for a trending market I find that the price tends to use the upper BB as track so to speak. Moving either side of ot when the price is moving well and using the middle BB moving average as support, so yes it can sometimes be difficult to spot reversals when outer BBs are broken. Hence the need for some other form of confirmation.

Regards
Simon
  • #11
  • May 31, 2018 10:24pm May 31, 2018 10:24pm
Quoting Simyc1
{quote} Hi Michael, I'm using MT4 so will have to look i to how to add a H1 BB onto a 5min chart. Im guessing theres an EA/Indicator out there somewhere for this. I think i understand what you mean in that by checking that the price is also within the H1 BB on a 5min chart, this would add strength to the direction price may then go.... NB i'm using the H4 RSI crossover of 50 as my initial trigger to even look at a trade, then applying the BBs to it. I'll have to do some research into Donchian Bands they are totally new to me. As for a trending market...
I'm also using MT4. Yes, using RSI overbought and oversold levels is perfect with bollinger bands.

Bands within bands filter out bad signals, so you can put bollinger bands inside or outside keltner bands. Or donchian bands or bollinger bands with different dev settings. See images below.

In my EA bollinger band results:
- buy on lower band, sell on upper band
- TP/SL 10 (or 20/30/40/50)
- RSI overbought/oversold
there was no profit. It seems that the probabilityis 50-50% whether price breaks out the BB or bounces back to the other BB band. In conclusion, there need to be additional rules/filters how to define trend/swings/range. Just adding RSI will not help in my results. So what you said "Hence the need for some other form of confirmation." is true, we need better confirmation to filter out trend and consolidation.
_______________
Below images: bands inside bands is a good confirmation to filter
Attached Image(s) (click to enlarge)
Click to Enlarge Name: donchian[1].gif Size: 13 KB
Click to Enlarge Name: image.gif Size: 45 KB
Click to Enlarge Name: bollinger-band-Cryptocurrency-800x467.jpg Size: 69 KB
Click to Enlarge Name: Forex-Trading-Strategy-Forex-Bollinger Bands and Multi Zig Zag BUY.jpg Size: 94 KB
Click to Enlarge Name: maxresdefault.jpg Size: 108 KB
Click to Enlarge Name: pNFn8WG.jpg Size: 60 KB
Click to Enlarge Name: 62ayyEy6.png Size: 173 KB
Click to Enlarge Name: b7417e7c187decdf64959c389f7ade42.png Size: 57 KB
Attached Images
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  • #12
  • May 31, 2018 10:25pm May 31, 2018 10:25pm
Quoting Simyc1
{quote} Hi Michael, I'm using MT4 so will have to look i to how to add a H1 BB onto a 5min chart. Im guessing theres an EA/Indicator out there somewhere for this. I think i understand what you mean in that by checking that the price is also within the H1 BB on a 5min chart, this would add strength to the direction price may then go.... NB i'm using the H4 RSI crossover of 50 as my initial trigger to even look at a trade, then applying the BBs to it. I'll have to do some research into Donchian Bands they are totally new to me. As for a trending market...
Images:
Attached Image(s) (click to enlarge)
Click to Enlarge Name: bollinger-bands-macd-cross-strategy-2_1_orig.png Size: 296 KB
Click to Enlarge Name: donchian-800x480.png Size: 86 KB
Attached Images
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  • #13
  • May 31, 2018 10:27pm May 31, 2018 10:27pm
Quoting Simyc1
Hi Guys n Gals, Newbie here with a half decent understanding of the game lol. Have used Bollinger Bands in the past for scalps, when it crosses outside bands with a view to scalping it back to the middle, albeit with mixed results, primarily being over eager and taking trades too early. So lately I've been playing around with using BB H4 and BB H1, to effectively filter out Trades I don't want to look at. Essentially making sure the BBs over the two timeframes are in order. eg 1 > 2 > 3 > 4 > 5 1) BB High H4 = 1.8 2) BB High H1 = 1.6 3) Price =...
Screenshots
Attached Image(s) (click to enlarge)
Click to Enlarge Name: kelt-1-qqqqexam.png Size: 66 KB
Click to Enlarge Name: tsla-a.png Size: 22 KB
Attached Images
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  • #14
  • May 31, 2018 10:28pm May 31, 2018 10:28pm
Quoting derekw
{image} {file}
Thank you for the indicator. I will check it out.
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  • #15
  • May 31, 2018 10:41pm May 31, 2018 10:41pm
Etienne--Desire to trade on youtube is a BB guy
  • #16
  • May 31, 2018 11:32pm May 31, 2018 11:32pm
Quoting yanetjellen
Etienne--Desire to trade on youtube is a BB guy
Thank you. I will check him out.
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  • #17
  • Jun 1, 2018 5:56am Jun 1, 2018 5:56am
To determinate the start of the BREAKOUT I use Ichimoku. Before entry in the market trader should assess the situation with the lines of support and resistance, see what the situation is in the trend on the older timeframe, so as not to fall on the trend reversal. You need to consider the news background and volatility, which will affect the percentage of risk and the distance to the stop-loss.
  • #18
  • Jun 1, 2018 6:28am Jun 1, 2018 6:28am
Quoting derekw
{file}
Becarefull, this indi badly repaint. Too good to be honest
Bottomless wonders spring from simple rules, which are repeated without end
  • #19
  • Jun 1, 2018 10:55pm Jun 1, 2018 10:55pm
Quoting Talk2Know
To determinate the start of the BREAKOUT I use Ichimoku. Before entry in the market trader should assess the situation with the lines of support and resistance, see what the situation is in the trend on the older timeframe, so as not to fall on the trend reversal. You need to consider the news background and volatility, which will affect the percentage of risk and the distance to the stop-loss.
Thank you. I appreciate it very much. Have you tried Bollinger bands inside other Bollinger bands (like the images above)?
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  • #20
  • Jun 26, 2018 8:11pm Jun 26, 2018 8:11pm
Can anyone help me? I'm looking for a bollinger band combined with another indicator:
- Bollinger band with ATR (instead of stDev)
- Bollinger band with oscillator (RSI or Stoch)
- Bollinger band based on volumes, macd or ichimoku cloud
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