I use Bollingers quite a bit. But they are indeed modified from the default settings. I prefer longer times such as 40 bars and then look at standard deviation settings of 0.5, 1, 3. Once in a trade I am using them as an aide for easy viewing of the probability cloud that I have calculated. Think about electron orbitals around an atom. I look at future price as being contained in a cloud of probability. For entry I prefer the 3rd deviation; if in am looking for a breakout. Also use them for trading ranges to get probabilities between the lower deviations, essentially a scalping technique. All this get applied (with a lot of other mumbo-jumbo that I consider) to come up with a probability for the trade. Also use Donchian Channels. Setting them at 80 or twice the Bollinger gives a fast look to see if I am going too far astray. A reference point if you will, like a pilot wanting to see the horizon. That's it for the indicators. Toss in a bit of data collection and maths; and look at the candles/price action and S/R levels. That's my trading scheme. This post by @isotope https://www.elitetrader.com/et/thre...-hybrid-experiment.300013/page-9#post-4286317 touched on the concept. Shows not really any new ideas, I had been plugging away with this for a few years. I did some data collection (experiments) to test the theory (that whole scientific method thing). I found different percentages than what he mentioned but there could be all sorts of reasons for that. Works for me is all I can offer. Took some work to get the data, and I had to be very cautious of bias to be sure I was not "curve fitting" the data. Trading alone does not give the opportunity for double blind testing.
the reason all these fail is not as much the indicator as it is the data you put it on. Pirelli P Zero Corsa on a Pinto Station wagon, still going to crash and burn. there is a best indicator but y'all don't have it. lol
Everyone has it, it just doesn't get used. The most powerful pattern recognition hardware/software combination comes built in from birth.
When you get to think about it there is no mystery why indicators don't work. How can any indicator possibly know where the trades in the next time frame will push the price.
The pro-trader friend I mentioned (in the post to which you were replying) is using only slightly longer periodicity and only slightly wider SD settings than you, and from what I can tell from your other comments, is also using them in a very similar way and for the same purposes as you. This also makes complete sense to me. So I found your post extremely interesting.
It doesn't. It ummm indicates where price might go. But am I missing something - how does someone know where trades in next time frame will happen with absolute certainty?
The MACD really helped me understand what is happening with the price action as we approach levels. You see the same thing in the bar chart itself too but the indicator just simplifies it in my opinion.