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EP191: Have you ever tested strategies using Bollinger Bands?
Headsup! If you want to dig deeper into this, head to the forum and you will find a very interesting (and frustrating!) original strategy there.
In this episode of Truth About FX, Walter shares his experience with trading strategies using Bollinger Bands. You will also learn about this trader in the NFN forum who uses some very effective tricks using this strategy. According to Walter, this is one of the strategies that can be automated easily if you know the trick (which you will find here too!) You will also learn about his “lighthouse” strategy and the pullback method.
Download (Duration: 8:34 / 20.5 MB)
In This Episode:
00:58 – original strategy 01:26 – rainbow 03:00 – whipsaw 04:29 – naked ones 06:24 – inherent difficulties
Tweetables:Wait for the bands to restrict [Click To Tweet].Warning: it can be frustrating [Click To Tweet].Does it fit your personality? [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Are there any strategies that you’ve tested with Bollinger bands?
Walter: Yes, I did do one and I actually traded it but it was back in 2006, something like that. Anyway, the way that it worked was that you would, I know Nicola and Emmanuel in the forum. If you’re in the forum, you can see that they both trade with… Oh no! Sorry. Emmanuel no longer does but he used to. Nicola uses Emmanuel’s original strategy with Bollinger bands so there’s a couple of them there.
If you’re interested in that and you’re in the forum, you can check that out but the one I’m talking about is totally different. It was really cool actually. It was frustrating though and at a certain point I just decided to move to last keys setup instead but I’ll explain how it works.
It’s a simple idea. What you do is you put a bunch of Bollinger bands on the chart like a whole bunch of six or ten or something. Crazy, right? They all have slightly different settings and so they end up like these rainbow-colored charts and with all these different colors.
What you do is and this would be really easy to automate, by the way. In fact, one of my friends did do this, who is trading this. I think he ended up automating it and I don’t know if he is still trading it. I haven’t kept in touch but essentially what you would do is you would wait for the candles so you wait for all those Bollinger bands to restrict and get really tight and close together.
They all have slightly different settings. Point one and point one-five, or point two or whatever, it was like that.
And so then what will happen is that they would restrict and after a certain number of candles, you would have a trade ready to go. So if the market got really quiet and the candle sat inside all of those ...
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By Walter Peters (FXJake) and Hugh Kimura (Trading Heroes)Headsup! If you want to dig deeper into this, head to the forum and you will find a very interesting (and frustrating!) original strategy there.
In this episode of Truth About FX, Walter shares his experience with trading strategies using Bollinger Bands. You will also learn about this trader in the NFN forum who uses some very effective tricks using this strategy. According to Walter, this is one of the strategies that can be automated easily if you know the trick (which you will find here too!) You will also learn about his “lighthouse” strategy and the pullback method.
Download (Duration: 8:34 / 20.5 MB)
In This Episode:
00:58 – original strategy 01:26 – rainbow 03:00 – whipsaw 04:29 – naked ones 06:24 – inherent difficulties
Tweetables:Wait for the bands to restrict [Click To Tweet].Warning: it can be frustrating [Click To Tweet].Does it fit your personality? [Click To Tweet].
Announcer: Sometimes, forex trading is a wild and wooly place to be. That’s why Hugh is here, to post your questions to Walter, the naked forex guy. Hugh’s got questions and Walter’s got the answers. Here at the Truth About FX Podcast.
Hugh: Hi, Walter. Are there any strategies that you’ve tested with Bollinger bands?
Walter: Yes, I did do one and I actually traded it but it was back in 2006, something like that. Anyway, the way that it worked was that you would, I know Nicola and Emmanuel in the forum. If you’re in the forum, you can see that they both trade with… Oh no! Sorry. Emmanuel no longer does but he used to. Nicola uses Emmanuel’s original strategy with Bollinger bands so there’s a couple of them there.
If you’re interested in that and you’re in the forum, you can check that out but the one I’m talking about is totally different. It was really cool actually. It was frustrating though and at a certain point I just decided to move to last keys setup instead but I’ll explain how it works.
It’s a simple idea. What you do is you put a bunch of Bollinger bands on the chart like a whole bunch of six or ten or something. Crazy, right? They all have slightly different settings and so they end up like these rainbow-colored charts and with all these different colors.
What you do is and this would be really easy to automate, by the way. In fact, one of my friends did do this, who is trading this. I think he ended up automating it and I don’t know if he is still trading it. I haven’t kept in touch but essentially what you would do is you would wait for the candles so you wait for all those Bollinger bands to restrict and get really tight and close together.
They all have slightly different settings. Point one and point one-five, or point two or whatever, it was like that.
And so then what will happen is that they would restrict and after a certain number of candles, you would have a trade ready to go. So if the market got really quiet and the candle sat inside all of those ...