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                             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
#13803   Not so at all.I like your setups.U are MB3 07/02/12 08:47:27 PM
#13802   MB3 What I think is not important. TREND1 07/02/12 08:45:23 PM
#13801   Either up or down.Is that the answer u MB3 07/02/12 08:34:31 PM
#13800   MB3 Before you go to sleep, where do you TREND1 07/02/12 08:08:05 PM
#13799   Thank u very much for the explanation.Now I MB3 07/02/12 07:59:01 PM
#13798   MB3 I am a trend follower. TREND1 07/02/12 07:56:43 PM
#13797   Trend do u see us going higher on MB3 07/02/12 07:16:48 PM
#13796   monday update by tony caldaro TREND1 07/02/12 04:20:57 PM
#13795   Here is one of the charts using Art TREND1 07/02/12 02:11:41 PM
#13794   Art Hill still longer term bearish. TREND1 07/02/12 12:21:41 PM
#13793   Also note that $TNX is staying below 1.70 TREND1 07/02/12 10:48:16 AM
#13792   I read the SP FUTURE chart using Dow Theory. TREND1 07/02/12 10:40:53 AM
#13791   SPY_60 On the 60-minute chart, the S&P 500 ETF TREND1 07/02/12 07:43:33 AM
#13790   weekend update by tony caldaro (only part) TREND1 06/30/12 07:38:50 PM
#13789   $NYAD_LINE_W_8 YEARS TREND1 06/30/12 04:59:41 PM
#13788   If VOL_THRUST fails on Monday, it will be TREND1 06/30/12 04:23:25 PM
#13787   $NYAD LINE TREND1 06/30/12 04:05:31 PM
#13786   friday update by tony caldaro TREND1 06/29/12 04:59:11 PM
#13785   Is this a bear covering rally ? TREND1 06/29/12 01:53:24 PM
#13783   Another GOOD video covering: TREND1 06/29/12 12:36:37 PM
#13782   Is IAG forming Reverse Head and Shoulder here VanWilder 06/29/12 11:37:04 AM
#13781   Watching Today TREND1 06/29/12 10:15:34 AM
#13780   IWM_D Jun 29, 2012 SPY Holds Support for TREND1 06/29/12 09:05:56 AM
#13779   Art Hill says one should determine the trend. TREND1 06/28/12 08:47:15 PM
#13778   thursday update by tony caldaro TREND1 06/28/12 04:24:57 PM
#13777   SPY_60 From art Hill TREND1 06/28/12 02:58:11 PM
#13776   XRT_D Of note, the Consumer Discretionary SPDR (XLY) edged TREND1 06/28/12 12:22:23 PM
#13775   wednesday update by tony caldaro TREND1 06/27/12 08:37:42 PM
#13774   TZA_D Vol Thrust TREND1 06/27/12 12:42:59 PM
#13773   IWM_60 From Art Hill (will not up date) TREND1 06/27/12 10:11:37 AM
#13772   IWM_W Wyckoff looks clearer now. TREND1 06/26/12 11:24:25 PM
#13771   Murray I read and post Tony most days. TREND1 06/26/12 06:04:50 PM
#13770   Thanks for posting the update TREND1, do you Y worry Murray 06/26/12 04:34:39 PM
#13769   tuesday update by tony caldaro TREND1 06/26/12 04:09:55 PM
#13768   RCKS Gone for an hour to Peets. TREND1 06/26/12 11:39:26 AM
#13767   RCKS You bought TRIN to my attention. TREND1 06/26/12 11:27:09 AM
#13766   Duma You asked TREND1 06/26/12 11:23:15 AM
#13765   That is impressive results. Do you think Duma 06/26/12 11:19:34 AM
#13764   Appreciate your comment. I know the system Duma 06/26/12 10:54:47 AM
#13763   Duma Just to let you know, have been working TREND1 06/26/12 10:21:05 AM
#13762   MB3 Used indicators. TREND1 06/26/12 09:54:43 AM
#13761   SPX_D From art Hill TREND1 06/26/12 09:52:07 AM
#13760   Question.How did you get TZA to appear at MB3 06/26/12 09:46:35 AM
#13759   TREND1, Thanks bookmarked. 442 oldsman 06/25/12 10:47:48 PM
#13758   Kool MB3 06/25/12 09:48:51 PM
#13757   S and P 500 Futues WOW! .... It TREND1 06/25/12 09:01:25 PM
#13756   TZA_D Next day TZA_D will have an UP CLOSE TREND1 06/25/12 08:01:35 PM
#13755   IWM_D Break RRC to the down side TREND1 06/25/12 04:19:36 PM
#13754   monday update by tony caldaro TREND1 06/25/12 04:13:06 PM