Look at your chart from 1/19 through 1/21. Price was outside the 3rd band for a while. Could you have survived that big of a draw down? BB mean reversion systems work awesomely until price trends too hard one day and you blow your account. It may happen on the first day, or it may happen 4 years from now.
Here is what this blog author explains about his usage of FORCE Index. http://short-termtrading.blogspot.com/2010/01/netflix-inc-nflx-subscribers-rise.html The force Index indicator. I used the force index indicator, which is an indicator measuring the force of bulls during uptrends and the force of bears in downtrends. It takes into account price and volume. I applied a 13-day exponential moving average (EMA) of the force index to help track the trend. When the trend is positive, the color is blue; when the trend is negative, the color is red. My Question : I do not have Trade Station to verify his BLUE/RED marking of price bars based on Force Index. 1) But it seems it is TOO good to be true, the BLUE/RED bars indicate LONG trend with good ACCURACY 2) can somebody with TradeStation verify this RED/BLUE price bars based on FORCE index explained above ? 3) all this blogger has dozens of charts based on his Force Index with BLUE/RED price bars , all of them indicating very good LONG Trend it seems TradeSattion functions forzadown(13) forzaup(13) are used ( by looking at chart on TOP) CITI , GOOGLE , etc.. charts .. ----------------------------------- http://short-termtrading.blogspot.com/2010/01/18-likely-to-buy-apple-inc-aapl-tablet.html http://short-termtrading.blogspot.com/2010/01/goldman-sachs-group-inc-gs.html http://short-termtrading.blogspot.com/2010/01/citigroup-inc-c-76-bln-loss-meets-wall.html
From Wikipedia: "A recent study concluded that Bollinger Band trading strategies may be effective in the Chinese marketplace, stating: "Finally, we find significant positive returns on buy trades generated by the contrarian version of the moving average crossover rule, the channel breakout rule, and the Bollinger band trading rule, after accounting for transaction costs of 0.50 percent." Nauzer J. Balsara, Gary Chen and Lin Zheng The Chinese Stock Market: An Examination of the Random Walk Model and Technical Trading Rules [4]. (By "the contrarian version", they mean buying when the conventional rule mandates selling, and vice versa.)"
thanks guys, yes I do have eSignal and love it, but I have only now realized I must learn backtesting.. I know this is terribly naive, better late than never!
Permit me to recommend that you do it the easy way first. Go to "Tools", "EPS", "Formula Wizard" and fool around with their code autogenerator. After you get an idea how EFS script is structured, you can go to the EFS Knowledgebase here: http://kb.esignal.com/display/2/ind...dt2WJi7&cid=4&cat=&catURL=&r=0.16257643699646 to dig in deeper. I suspect that the autocoding can generate what you want right away. My condolences, Alice. Remember how to find your way back out.
Multiple BB's will give you multiple lagging indications of what the average volatility used to be, instead of just one lagging indicator of what the average volatility used to be.
indicators(any) = wealth redistribution tool from the poor to the wealthy the weak hands to the strong hands the outsiders to the insiders retailers to market makers in other words, stay away, unless you are wealthy, or strong hand, or insider or market maker (they use them the other way though...)
http://www.trading-naked.com/librar...- Using Bollinger Bands by John Bollinger.pdf bollingers outlook on bollinger bands
Maybe, think of the bollinger as a rubber band as opposed to a barrier. Everything you trade is different with respect to standard deviation and volatility. You have to do your homework, some timeframes are neither here nor there, and price deviation dictates trend. Exception being oscillation.