Did you mention whether this BB trading system distinguishes between wide and narrow BBs? Between high volatility and low volatility? It could make a difference whether the rules are applied when the bands are narrow or wide or just in one of the cases.
Didnt I already point out that BBs are problematic in defining strict entry and exits?..However they do add significant value in the way they impart high and low volatility transitions in price action more clearly... and we all know low volatility (Pinch) is superseded by a move or breakout in many markets.. I think thats valuable.. it increases confidence.. my trading success improved substantially on using them whilst learning through discretionary trades.... Granted ..though mechanically.. theres a problem.. but optioncoach had some interesting ideas no?
There isn't a problem with entry. This website I quote uses the classic rules. The problems start when people start toying with entry/exit rules and making it difficult to quantify.
Curious: Why is it that the 1.5 Std Dev BB Band is so oftn paired with the 2x-AvgTR Keltner? Why not 2 Std Dev with 2x-AvgTR? Is the assumption that two times the Average True Range = 1.5 Std Devs? If so, why? What am I missing here?
boller bands haven't been proven to work. They are innefective tool for any TA. I don't recommend them at all.
I don't use BB's but I have in the past. I was thinking that 2 std deviations was the "norm" for BB's.
BB are bullshit... they derive their value from past price action and have no predictive value..... why not use MACD crossovers instead? at least you can look at the mechanical crossover to make a decision.... since the market is hot money gunning one sector at a time, they're looking at the same charts everyone else is.... you may miss the first 20% of the move but you can capture the next 50%
I've been having some fun with BBs too. I'm using them along with MACD in two timeframes. In the longer chart (30 minutes) I look for a somewhat mild trend. For a long trend, MACD is positive but not overly so, and the price is trading slightly above the middle BB. Then I switch to the 3 minute chart and look for negative MACD and a red candle touching the middle or lower BB. At that point I go LONG. To me this indicates that the retracement is just about over and the trend is about to resume. I use a fairly tight trailing stop to cut my losses and let my profits run on the occasion that there's a quick rise/plunge.