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Last Post: 4/18/2014 9:53:43 AM - Followers: 189 - Board type: Premium - Posts Today: 0

                             CHARTS TREND FOLLOWER  
                                            (1) No penny stocks    (2) No Politics nor religion    (3) No one who sells on IHUB.  
                                            (4) SORRY. No longer will accept posts of BUYS or SELLS, unless they have Today's date. Why? Because others can no longer buy nor sell "yesterday."   

 Page 171 A trader who does not use stops will eventually take the mother of all losses.


In the 1960's before computers the President of AMEX
wrote a little booklet showing how he is kept the Friday closing price of each stock he followed.

He stated that the weekly trend was the best trend to follow.
Because it was the shortest time level that could not be touched by trading activities.

MACD PART 1 by Mark Ledermann
MACD PART 3 Very Interesting 

Bollinger Bands Basic Rules

Bollinger Bands were created by John Bollinger, CFA, CMT and published in 1983. They were developed in an effort to create fully-adaptive trading bands. The following rules covering the use of Bollinger Bands were gleaned from the questions users have asked most often and our experience over 25 years with Bollinger Bands.

1. Bollinger Bands provide a relative definition of high and low. By definition price is high at the upper band and low at the lower band.

2. That relative definition can be used to compare price action and indicator action to arrive at rigorous buy and sell decisions.

3. Appropriate indicators can be derived from momentum, volume, sentiment, open interest, inter-market data, etc.

4. If more than one indicator is used the indicators should not be directly related to one another. For example, a momentum indicator might complement a volume indicator successfully, but two momentum indicators aren't better than one.

*5. Bollinger Bands can be used in pattern recognition to define/clarify pure price patterns such as "M" tops and "W" bottoms, momentum shifts, etc.

6. Tags of the bands are just that, tags not signals. A tag of the upper Bollinger Band is NOT in-and-of-itself a sell signal. A tag of the lower Bollinger Band is NOT in-and-of-itself a buy signal.

*7. In trending markets price can, and does, walk up the upper Bollinger Band and down the lower Bollinger Band.

*8. Closes outside the Bollinger Bands are initially continuation signals, not reversal signals. (This has been the basis for many successful volatility breakout systems.)

9. The default parameters of 20 periods for the moving average and standard deviation calculations, and two standard deviations for the width of the bands are just that, defaults. The actual parameters needed for any given market/task may be different.

10. The average deployed as the middle Bollinger Band should not be the best one for crossovers. Rather, it should be descriptive of the intermediate-term trend.

11. For consistent price containment: If the average is lengthened the number of standard deviations needs to be increased; from 2 at 20 periods, to 2.1 at 50 periods. Likewise, if the average is shortened the number of standard deviations should be reduced; from 2 at 20 periods, to 1.9 at 10 periods.

12. Traditional Bollinger Bands are based upon a simple moving average. This is because a simple average is used in the standard deviation calculation and we wish to be logically consistent.

13. Exponential Bollinger Bands eliminate sudden changes in the width of the bands caused by large price changes exiting the back of the calculation window. Exponential averages must be used for BOTH the middle band and in the calculation of standard deviation.

14. Make no statistical assumptions based on the use of the standard deviation calculation in the construction of the bands. The distribution of security prices is non-normal and the typical sample size in most deployments of Bollinger Bands is too small for statistical significance. (In practice we typically find 90%, not 95%, of the data inside Bollinger Bands with the default parameters)

15. %b tells us where we are in relation to the Bollinger Bands. The position within the bands is calculated using an adaptation of the formula for Stochastics

16. %b has many uses; among the more important are identification of divergences, pattern recognition and the coding of trading systems using Bollinger Bands.

17. Indicators can be normalized with %b, eliminating fixed thresholds in the process. To do this plot 50-period or longer Bollinger Bands on an indicator and then calculate %b of the indicator.

18. BandWidth tells us how wide the Bollinger Bands are. The raw width is normalized using the middle band. Using the default parameters BandWidth is four times the coefficient of variation.

*19. BandWidth has many uses. Its most popular use is to indentify "The Squeeze", but is also useful in identifying trend changes...

20. Bollinger Bands can be used on most financial time series, including equities, indices, foreign exchange, commodities, futures, options and bonds.

21. Bollinger Bands can be used on bars of any length, 5 minutes, one hour, daily, weekly, etc. The key is that the bars must contain enough activity to give a robust picture of the price-formation mechanism at work.

22. Bollinger Bands do not provide continuous advice; rather they help indentify setups where the odds may be in your favor.

A note from John Bollinger:
One of the great joys of having invented an analytical technique such as Bollinger Bands is seeing what other people do with it. These rules covering the use of Bollinger Bands were assembled in response to questions often asked by users and our experience over 25 years of using the bands. While there are many ways to use Bollinger Bands, these rules should serve as a good beginning point.

To learn more about Bollinger Bands:

Bollinger on Bollinger Bands book
Bollinger Bands DVD Covers the material from Bollinger on Bollinger Bands book
Bollinger Band DVD 2011 Covers latest work

To view a webinar covering these 22 rules, click here.

© Bollinger Capital Management. All rights reserved

#15850  Sticky Note IWM_W TREND1 11/29/13 12:16:59 PM
#15849  Sticky Note IWM_D TREND1 11/29/13 12:13:55 PM
#15848  Sticky Note IWM_1 TREND1 11/29/13 11:55:03 AM
#15910   Test of 115.25 on daily chart. TREND1 04/18/14 09:53:43 AM
#15909   Since March 24, 2014 TREND1 04/17/14 05:25:37 PM
#15908   Stop hit TREND1 04/15/14 10:30:54 AM
#15907   Buy April 14, 2014 at 110.72 TREND1 04/14/14 06:13:11 PM
#15906   Stop hit TREND1 04/10/14 01:26:13 PM
#15905   Interesting daily chart shows positive divergence of TREND1 04/10/14 12:42:22 AM
#15904   Daily chart test of 118.48 high. TREND1 04/09/14 05:18:12 PM
#15903   When I talk about the foot indicator I TREND1 04/09/14 10:52:50 AM
#15901   Foot indicator buy 113.61 TREND1 04/08/14 11:17:42 PM
#15900   Foot indicator calls bottom. TREND1 04/08/14 06:04:06 PM
#15899   foot indicator cocked and ready. TREND1 04/07/14 06:36:02 PM
#15898   Lower low on the daily chart TREND1 04/07/14 11:33:47 AM
#15897   118.48 is now a lower high on the TREND1 04/04/14 05:38:55 PM
#15896   Test of 118.48 on daily chart TREND1 04/03/14 05:52:23 PM
#15895   The one minute chart shows lower highs and TREND1 04/03/14 03:22:24 PM
#15893   This board is really about IWM trend TREND1 04/02/14 10:56:15 AM
#15891   Read intro no Penny stocks allowed thank you TREND1 04/02/14 10:47:43 AM
#15888   Testing 119.95 on daily chart. TREND1 04/01/14 10:33:01 AM
#15887   Close above EMA 13 would give a buy TREND1 03/31/14 02:01:36 PM
#15885   Waiting for the foot indicator to give buy TREND1 03/27/14 11:15:31 AM
#15883   IWM daily trend is down. TREND1 03/26/14 11:28:17 AM
#15882   Prices change due to the dividend. TREND1 03/26/14 11:24:26 AM
#15881   116.38 taken out IWM daily in down trend TREND1 03/24/14 11:53:34 AM
#15878   119.88 taken out TREND up for IWM daily TREND1 03/21/14 01:17:01 PM
#15877   Key number for today is 119.88 for IWM daily. TREND1 03/20/14 10:32:25 AM
#15876   Higher lows = daily trend up for IWM TREND1 03/18/14 11:46:38 AM
#15875   Higher low of 116.38 on daily IWM TREND1 03/18/14 10:52:09 AM
#15874   A D lines showing broken support. TREND1 03/14/14 01:55:04 PM
#15873   A D lines now testing support. TREND1 03/13/14 08:14:09 AM
#15872   AD Line made new high, supporting up trend. TREND1 03/09/14 05:47:46 AM
#15871   iWM Weekly trend still up TREND1 03/07/14 11:40:53 AM
#15870   iWM daily and weekly still in uptrend. TREND1 03/05/14 12:04:01 PM
#15869   RCKS Glad to be back ....... TREND1 02/18/14 09:41:35 PM
#15866   Trend1 Great to see you post. RCKS 02/10/14 08:38:32 PM
#15865   Please intro to board. It says no penny stocks TREND1 02/10/14 04:16:51 PM
#15864   $EVCA: chart Le2dynasty 02/10/14 01:32:45 AM
#15863   $SAGD: chart Le2dynasty 02/10/14 01:31:57 AM
#15862   $IFIXQ: chart Le2dynasty 02/10/14 01:31:23 AM
#15861   $INAR: chart Le2dynasty 02/10/14 01:30:37 AM
#15860   $DSCR: chart Le2dynasty 02/10/14 01:30:01 AM
#15859   $NOHO: chart Le2dynasty 02/10/14 01:29:26 AM
#15858   $MXAM: chart Le2dynasty 02/10/14 01:28:30 AM
#15857   $NVOB: chart Le2dynasty 02/10/14 01:27:45 AM
#15856   $CBYI: chart Le2dynasty 02/10/14 01:26:59 AM
#15855   $ANDI: chart Le2dynasty 02/10/14 01:26:14 AM
#15854   Larry Just seeing this news a moment ago and RCKS 01/15/14 02:37:10 PM
#15853   I think you said you had a stroke. Duma 12/27/13 12:46:26 PM
#15852   Had stroke Ok More later TREND1 12/16/13 06:15:05 PM
#15851   IWM_1 has sell confirmed TREND1 11/29/13 01:03:16 PM
#15850   IWM_W TREND1 11/29/13 12:16:59 PM