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-   -   Anyone using Bollinger Bands to make money? (http://www.elitetrader.com/vb/showthread.php?t=9997)

jbtrader23 Oct 19th, 2002 03:24 AM

Anyone using Bollinger Bands to make money?
 
One of my favorite TA tools are Bollinger Bands. I keep them at the standard, 20 day, 2 standard deviation setting.

It's amazing to me, that no matter what stock chart I pull up, from no matter what country, a stocks price action is contained within the bands 90% or more of the time. To me, that's a major clue as to when things get extreme. I have yet to see another indicator with that kind of accuracy. And it's universal in it's application. Not the "flavor the month", such as buying breakouts or shorting head and shoulder patterns. Those can work in certain markets, but there seems to be something much more mathematically "real" about a security reverting to its mean and having an indicator which can capture that process. And it working in any kind of market environment.

Any other thoughts on this? I'm still tweaking some of my original scans to come up with more optimal entry and exit points. The exit is the easy part. Simply selling after it re-enters the band at a pre determined percentage. The hard part is the stop loss and whether to play end of day or intraday, or even weekly.

xianokie Oct 19th, 2002 07:54 AM

Anyone using Bollinger Bands to make money?
 
John Bollinger has made a load selling books videos.

Trend Fader Oct 19th, 2002 08:18 AM

In my opinion any strategy based on Bollinger Bands is useless. In a strong market prices will stay near the upper band and in a weak one.. they will stay near the lower band. In a sideways market they will stay somewhere in the middle and maybe bounce from the upper to lower band.

Gee.. do you really need bands to tell you this? Whats so great about this indicator. Its really pure common sense.

The only thing I use bollingers for .. simply visual aid. Strategy wise.. they never really work. You wanna short when price penetrates the upper band .. you will be right in a choppy market and get killed in a trending market.

Maybe the only use would be to see how the bands tighten or loosen for breakout traders.. but this can be easily viewed with out them.

In reality they are just a nice visual guide.. and experienced traders can trade just as good w/o them.

John Bollinger is just another spin doctor re-packaging common sense to the public in the form of an idicator.. and making millions at it. I just bet he made more $ selling his products than he has trading with them.


--MIKE

NihabaAshi Oct 19th, 2002 10:49 AM

In Concert...
 
There are some good discussions here in the past on Bollinger Bands...

you may want to use ET's handy SEARCH menu up there in the upper right corner to review such past discussions.

I personally know lots of traders successfully trading via Bollinger Band...making a living at it.

However...with that said...all such traders use Bollinger Bands in CONCERT with other indicators or technical analysis.

Lets put it this way...any trader that only uses one indicator and no other indicator, chart pattern or anything to do with another form of technical analyis...won't last to long in this business.

Simply...always use something to confirm that particular indicator.

P.S. I use Bollinger Bands successfully in trading the Emini Futures along with Stochastic, MACD, Price Exponential Moving Averages, Volume and Japanese Candlesticks.

NihabaAshi

murray t turtle Oct 19th, 2002 02:26 PM

JBtrader23 quote Using Bollinger Bands to make money?''
 
Yes; and look on about 99 or 100 other things to make money.

Unfortunately they are probably not that ''90%'' in a real strong trends[or sharp rally] like tech stocks in October;however still helpful any way.:cool: A tag of the bands some times doesn't mean much.

---------------------------------------------
Star wars trend ''The stars fought in thier courses [spheres]''

traderkay Oct 20th, 2002 02:14 AM

jbtrader, i have consistently found BBands to be worthless. Could you tell us a simple mechanical way of trading them that will bring consistent profits. just post the strict rules for entry and exit. i can do the testing as can many other people on the board. Yes, it's a challenge.


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