bw = bill williams http://www.amazon.com/gp/reader/0471295418/ref=sib_dp_pt/102-5790606-6096138#reader-link
OK, here is the free version from Bigcharts.com. Just to show that one doesn't need a fancy software.... #3 wasn't exactly a touching of the band, but the sell signal I marked with an X actually dropped 10+ points before turning back, so either way, we had about 5 valid signals and we didn't even caught the 2nd part of the big move after 3 pm... Anyway, the 5 signals on average 20 points gains, I guess that is about 100 points...
Since you guys love to back test. Run this one and see what you come up with. Fed flip flop theory. On days following the FOMC, the theory is the market will do the opposite of what happened the day before.
Wow.. thats a great theory. It is also something I was vaguely thinking about, without being able to put my finger on it. Thats awesome. It always overreacts.. (yesterday it did it also due to the GOOG earnings). Anyway, I had the right idea in my mind when I decided to take a long overnight yesterday.
I went in short at 10:27 @ 928..... instead of getting out when i was up + 20 pts ..... i got gready and hanged on until 11:54...... for only a +3 pt gain
Here's a couple of years worth of FOMC Statement dates. I'll research as time allows. One or more of you may beat me to it. Source: http://www.federalreserve.gov/FOMC/#calendars 2/28/04 3/16/04 5/4/04 6/30/04 8/10/04 9/21/04 11/10/04 12/14/04 2/2/05 3/22/05 5/3/05 6/30/05 8/9/05 9/20/05 11/1/05 12/13/05 1/31/06
3 doesn't touch the BB and 5 is a long time after touching the BB. Easy to see these after the markets are closed but how do you trade those in real time? I would have missed 3 and would probably have given up on 5. 2 and 4 also look tricky, as they only just touch the BB. If you don't spend every minute looking at the screen, those would be easy to miss. I just think trading those is a lot more difficult than it looks.
Here's my opinion, which I think is completely objective. There was no entry on #3. Never got close to touching. Entry on #5 would have been worse than your arrow shows. Your arrow is pointing at the swinglow, not the touch of the BB. #X would have been a failed short entry. Your arrows point at the swinglows and swinghighs. An objective backtest would look at the true BB entries. If you actually took entries where your arrows point and will post your trade confirmations, then I'll be interested to know your methodology, because at that point it would be clear that it involves more than pure Bollinger Bands.
Bollinger combined with MACD Histogram and RSI will keep you from entering wrong most of the time--very powerful