Trading Setup 3- Bollinger Band Patterns

outcast81 (45)in #trading • 9 years ago (edited)

Hey

These are really simple to follow, and work well on any time frame. (from 15mins to daily charts)
You might just want to follow one of them, it will provide fewer signals, but what matters is the return.
As usual back test them in your favourite instrument and see how it goes, shouldn't be too hard, just patterns after all.
Studies:

Only Bollinger bands, you can check the volume too. If you are going to use intraday charts I sugest you test this with RSI (buy when below 50) and other oscilators.

BullishBreakout- Bands are narrow, buy when a candle closes above upper band. Even touching the band is fine. Sell when the bands start to narrow again. Stop loss on the break of the low of entry candle, or lower band, definitly test this. It is for sure going to work very diferent for diferent instruments.

And of course there is a Bearish Breakout aswell.
Same idea, narrow bands, bands start to widen, bearish breakout occurs, sell. Same idea also for the stop loss, high of entry candle or upper band.
Close position when the bands are very wide, it means high volatility. In the image you see me using a stochastic, and it's telling us the market is oversold(you can't see it, but its below 20). You can use other oscilator that gives you the oversold/overbought areas. Bands start to narrow can mean a change in a trend also, so it's best you confirm with oscilator and volume.

Bollinger Bounce
Bands narrow a bit, price seems starting to go sideways, price touches lower bollinger band, buy, or buy at the break of the high of the candle that closes inside, but that can be too late. Sell when price touches upperband.
This one is hard to spot sometimes, because the bands don't seem quite going sideways yet, don't worry and go for it just the same, because it's an normal movement, and even thou if you don't catch a bollinger bounce, you might be catching a price correction.