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Hello,
maybe some of you use Bollinger Bands (BBs) for trading. If so, I’d like to hear in which way you use it.
Here are some of my thoughts on a better use of BBs:
- Especially newbie traders believe that a price tag of the outer BB bands indicate a high probable turning points. Indeed, price can ride long time on the outer bands. Thus, a tag can be the start of a strong up/down trend. (I)
- During such a ride a potential change in direction or at least a weakening in acutal trend can be indicated by bends in opposite outer band. (II)
- BB squeezes can be understood as consolidation zones. Subsequent BB widening can be the start of a new (short term) trend. (III)
What do you think about these points? Do you use it in trading? When will a BB squeeze indicate the start of a big trend? Can we determine the direction before BB widens after a squeeze?
This reply has been reported for inappropriate content.
Hello, maybe some of you use Bollinger Bands (BBs) for trading. If so, I’d like to hear in which way you use it. Here are some of my thoughts on a better use of BBs:
- Especially newbie traders believe that a price tag of the outer BB bands indicate a high probable turning points. Indeed, price can ride long time on the outer bands. Thus, a tag can be the start of a strong up/down trend. (I)
- During such a ride a potential change in direction or at least a weakening in acutal trend can be indicated by bends in opposite outer band. (II)
- BB squeezes can be understood as consolidation zones. Subsequent BB widening can be the start of a new (short term) trend. (III)
What do you think about these points? Do you use it in trading? When will a BB squeeze indicate the start of a big trend? Can we determine the direction before BB widens after a squeeze?
BB is just what it is… A simple moving average with its std. deviation.
The only “meaningfull” thing I got out of it is the BB squeeze, which means flat or ranging market.
But than can be achieved by just looking at the flat angle of the MA…
G.
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I don’t think that’s enough to just look at the MA to know if there’s a squeeze as you can construct a situation in which the MA = 0 (or nearby zero) but consecutive candles of same colour form. (This can happen when a trend to an opposite direction starts.)
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I don’t think that’s enough to just look at the MA to know if there’s a squeeze as you can construct a situation in which the MA = 0 (or nearby zero) but consecutive candles of same colour form. (This can happen when a trend to an opposite direction starts.)
I didn’t say that it’s my way of determining flat market.
What I meant is when looking at bollinger Band all I can see is a channel, based on MA and its std. deviation. When that channel is flat, the market is ranging. I don’t use the BB because the “rule” of touching the outer band doesn’t always mean it will return to center. Many times it just continue with that same direction.
In short, I don’t use it…
G.
This reply has been reported for inappropriate content.
Hello, maybe some of you use Bollinger Bands (BBs) for trading. If so, I’d like to hear in which way you use it. Here are some of my thoughts on a better use of BBs:
- Especially newbie traders believe that a price tag of the outer BB bands indicate a high probable turning points. Indeed, price can ride long time on the outer bands. Thus, a tag can be the start of a strong up/down trend. (I)
- During such a ride a potential change in direction or at least a weakening in acutal trend can be indicated by bends in opposite outer band. (II)
- BB squeezes can be understood as consolidation zones. Subsequent BB widening can be the start of a new (short term) trend. (III)
What do you think about these points? Do you use it in trading? When will a BB squeeze indicate the start of a big trend? Can we determine the direction before BB widens after a squeeze?
I used it long time ago, but now i like to use TMA (although it is repaint) or keltner. Still trying to find a similar TMA bands (in term of its balance distance) but not repaint, or a modified keltner. As GG said, if price touch outer band of BB, it can go in the same direction more than retrace. But may be it is because of my bad setting ….
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Hi @Anti :
Using MA and BB as helping tools are great. As we know that BB using some price Deviation on its calculation. This deviation is calculated from its mid line, which is actually an MA line. In a side way market, BB upper line and lower line has only narrow distance, but in trending market the Distance between the two lines can be very big. COBB can appear every where, but how can we know that it is near the end of the trend (could be consolidation or reversing), by looking at the Distance of upper and lower line ? It is clear that it must be bigger than the average distance, but how big is it compare to its maximum distance ? ex: 80% , 90% of the max Distance pips ?
And the Maximum Distance is depend on how many bars we decide to look back for our calculation and also depend on the market situation … so, we will get different maximum distance for different BB period setting …
As “k” made a modified BB, do you use it ? Is it better than the one we normally use at MT4 ?
Any idea is welcometom.
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@thomas: You have very good questions and I have no answer to it (but that doesn’t mean that it can’t be used; I just don’t possess the knowledge). That’s the reason why I’ve never succeeded with the use of BBs. And yes, I know krpsa’s modified BB. But I don’t think that it’s useful (or at least as useful as the common BB).
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Hi Carlos,
I read your most recent 3 posts and all of them contain links to brokers’ websites. Could you please explain? To be honest, this looks a bit suspicious to me regarding spam.
s.
EDIT: spam content moved to the trash bin.
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
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Hi to be honest I am working how link builder of alpari.com
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Hi to be honest I am working how link builder of alpari.com
So I kindly ask you to stop this practice! Penguin’s currently follows a strict policy to allow non-commercial content only.
A good trader is a realist who wants to grab a chunk from the body of a trend, leaving top- and bottom-fishing to people on an ego trip. (Dr. Alexander Elder)
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