I trade longer term mechanical trading systems exclusively on the ASX. I rarely look at daily charts and the systems are built using weekly timeframes. The information in this site is based on actual trades in real portfolios. I don't trade using margin or any sort of leverage. I mainly use Amibroker for system testing and trade monitoring. I am not selling anything. This is just a journal to record where I have been and, just maybe, where I am going.
Friday, December 01, 2006
Bollinger bands
The chart above shows a nice bollinger band breakout on a weekly ERG chart. I am not in this trade and this is not an active system. I find this a more fruitful aproach than the traditional OB/ OS strategy commonly touted in trading books. I use this strategy to trigger buys in systems I trade. Combined with volume, momentum and a suitable exit it works quite well.
To quote from the Bollinger site;
"Price can, and does, walk up the upper Bollinger Band and down the lower Bollinger Band."
"Closes outside the Bollinger Bands can be continuation signals, not reversal signals--as is demonstrated by the use of Bollinger Bands in some very successful volatility-breakout systems."
Stevo
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