Bollinger bands win rate

Best Bollinger Bands Strategy // 93% Win Rate​​ So stick around because if you love winning strategies, this one is an all-time classic.
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Refresh and try again. Open Preview See a Problem? Details if other :. Thanks for telling us about the problem. Return to Book Page. Get A Copy. Kindle Edition. More Details Friend Reviews. To see what your friends thought of this book, please sign up. Lists with This Book. This book is not yet featured on Listopia. I want to touch on the middle band again. Just as a reminder, the middle band is set as a period simple moving average in many charting applications.

The middle line can represent areas of support on pullbacks when the stock is riding the bands. You could even increase your position in the stock when the price pulls back to the middle line.

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Regarding identifying when the trend is losing steam, failure of the stock to continue to accelerate outside of the bands indicates a weakening in the strength of the stock. This would be a good time to think about scaling out of a position or getting out entirely.

Bollinger Bands Trading Strategy: How to Trade it Like a PRO

John created an indicator known as the band width. The idea, using daily charts, is that when the indicator reaches its lowest level in 6 months, you can expect the volatility to increase. This goes back to the tightening of the bands that I mentioned above. This squeezing action of the Bollinger Band indicator foreshadows a big move. You can use additional signs such as volume expanding, or the accumulation distribution indicator turning up. We need to have an edge when trading a Bollinger Band squeeze because these setups can head-fake the best of us.

It immediately reversed, and all the breakout traders were head faked. Wait for some confirmation of the breakout and then go with it. If you are right, it will go much further in your direction. Notice how the price and volume broke when approaching the head fake highs yellow line. Notice how leading up to the morning gap the bands were extremely tight. Now some traders can take the elementary trading approach of shorting the stock on the open with the assumption that the amount of energy developed during the tightness of the bands will carry the stock much lower.

Another approach is to wait for confirmation of this belief. So, the way to handle this sort of setup is to 1 wait for the candlestick to come back inside of the bands and 2 make sure there are a few inside bars that do not break the low of the first bar and 3 short on the break of the low of the first candlestick.

No more panic, no more doubts. The below chart depicts this approach. Below is a snapshot of Google from April 26, Notice how GOOG gapped up over the upper band on the open, had a small retracement back inside of the bands, then later exceeded the high of the first candlestick.

These sorts of setups can prove powerful if they end up riding the bands. This strategy is for those of us that like to ask for very little from the markets. Essentially you are waiting for the market to bounce off the bands back to the middle line. You are not obsessed with getting in a position and it wildly swinging in your favor. Nor are you looking to be a prophet of sorts and try to predict how far a stock should or should not run.

By not asking for much, you will be able to safely pull money out of the market on a consistent basis and ultimately reduce the wild fluctuations of your account balance, which is common for traders that take big risks. The key to this strategy is waiting on a test of the mid-line before entering the position. You can increase your likelihood of placing a winning trade if you go in the direction of the primary trend and there is a sizable amount of volatility.

As you can see in the above example, notice how the stock had a sharp run-up, only to pull back to the mid-line. You would want to enter the position after the failed attempt to break to the downside. You can then sell the position on a test of the upper band. If you have an appetite for risk, you can ride the bands to determine where to exit the position. This is honestly my favorite of the strategies. If I gave you any other indication that I preferred one of the other signals, forget whatever I said earlier. First, you need to find a stock that is stuck in a trading range.

The greater the range, the better. Now, looking at this chart, I feel a sense of boredom coming over me. However, from my experience, the guys that take money out of the market when it presents itself, are the ones sitting with a big pile of cash at the end of the day. In the above example, you just buy when a stock tests the low end of its range and the lower band. Conversely, you sell when the stock tests the high of the range and the upper band. The key to this strategy is a stock having a clearly defined trading range. This way you are not trading the bands blindly but are using the bands to gauge when a stock has gone too far.

However, by having the bands, you can validate that a security is in a flat or low volatility phase, by reviewing the look and feel of the bands. So, instead of trying to win big, you just play the range and collect all your pennies on each price swing of the stock.


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Like anything else in the market, there are no guarantees. Bollinger Bands can be a great tool for identifying volatility in a security, but it can also prove to be a nightmare when it comes to newbie traders. Not exiting your trade can almost prove disastrous as three of the aforementioned strategies are trying to capture the benefits of a volatility spike. For example, imagine you are short a stock that reverses back to the highs and begins riding the bands.

What would you do?

Bollinger Bands ® – Top 6 Trading Strategies

While there is still more content for you to consume, please remember one thing — you must have stopped in place! Strategy 5 — Snap back to the middle band, will work in very strong markets.

I have been a breakout trader for years and let me tell you that most breakouts fail. Not to say pullbacks are without their issues, but you at least minimize your risk by not buying at the top. Shifting gears to strategy 6 — Trade Inside the Bands, this approach will work well in sideways markets.

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Because you are not asking much from the market in terms of price movement. From my personal experience of placing thousands of trades, the more profit you search for in the market, the less likely you will be right. In addition to strategies, there are a few items related to bands I need to cover that will provide you with a full picture of the indicator.

Profitable Bollinger Band Trading Strategies for FX Markets - Forex Training Group

I was reading an article on Forbes, and it highlighted six volatile swings of bitcoin starting from November through March So, I wanted to do my research, and I looked at the most recent price swings of Bitcoin in the Tradingsim platform. During this period, Bitcoin ran from a low of 12, to a high of 16, I am getting a little older now and hopefully a little wiser, and that kind of money that fast, I have learned is almost impossible for me to grasp. The psychological warfare of the highs and the lows become unmanageable. So, it got me thinking, would applying bands to a chart of bitcoin futures have helped with making the right trade?

I indicated on the chart where bitcoin closed outside of the bands as a possible turning point for both the rally and the selloff. You must honestly ask yourself will you have the discipline to make split-second decisions to time this trade, just right? The one thing the bands manages to do as promised is contain the price action, even on something as wild as bitcoin.

I honestly find it hard to determine when bitcoin is going to take a turn looking at the bands. Bitcoin is just illustrating the harsh reality when trading volatile cryptocurrencies that there is no room for error. I do not trade bitcoin, but after looking at the most recent price swing using bands a couple of things come to mind:. Pairing the Bollinger Band width indicator with Bollinger Bands is like combining the perfect red wine and meat combo you can find.

In the previous section, we talked about staying away from changing the settings. Well, if you think about it, your entire reasoning for changing the settings in the first place is in hopes of identifying how a security is likely to move based on its volatility. A much easier way of doing this is to use the Bollinger Bands width.

In short, the BB width indicator measures the spread of the bands to the moving average to gauge the volatility of a stock.