Notice: StockFetcher is experiencing server performance issues. We are working to resolve this issue as soon as possible. We apologize for any inconvenience.
StockFetcher Forums · Filter Exchange · BOLLINGER BAND TRADING STRATEGY<< 1 ... 19 20 21 22 23 ... 39 >>Post Follow-up
gabestogie
79 posts
msg #80247
Ignore gabestogie
9/28/2009 10:35:51 PM

Kevin:
I believe the confirmation signals are going to be an added plus to your system. I'll be going in on the new confirmation signals.
Gabe

decipherlinda
133 posts
msg #80250
Ignore decipherlinda
9/28/2009 11:35:31 PM

Going out on a limb here but RIMM doesn't look good (1) HUGE gap down Friday morning, and (2) no consolidation before the drop below the lower BB and no 'many days of drops' for capitulation of selling, (3) no upturn today (where it was almost hard to find a stock not going up), and (4) strong volume on the selling today indicates to me that the business problems RIMM had with their new phone being a bomb means it may go lower first. Looks like it was hit by a freight train. This is not your normal close below the lower BB. The opportunity to buy at a lower price may be just ahead although the product implications may mean rocky times ahead even if there is a white candle tomorrow.

OFG is worrisome even though there was a bullish engulfing today. Looks like it was consolidating and the bad few days we've been seeing in the indexes took it down a little. The BB wasn't tight until the last 4 to 5 days: the longer the tight BB's when the stocks been consolidating, the stronger the movement at the breakout. It could just pull back to the consolidation area and stablize back in the $13.84 +/- area. I heard that financials were strong in the afternoon today so that might help jump start it. And then, maybe I'm just plain wrong.

Seems like there are two basic ways a close below the BB's works. One is with capitulation selling where there's no one left to sell or who wants to sell so the bulls take over. The other is when the stock's been consolidating in a narrow range (a squeeze) and it breaks down below the Lower BB. This can be what Bollinger calls a head fake (look to the right when the ball's coming from the left to fake out the other team) and then it goes back up after a short time -- or it can be just a breakdown or return to consolidation.

If this has been already discussed, my bad.



Kevin_in_GA
4,557 posts
msg #80254
Ignore Kevin_in_GA
9/29/2009 12:05:25 AM

I probably jumped into RIMM too soon - that's why even though I own it, I am keeping it on the confirmation watchlist for now, as the system would dictate.

As for closing below the lower BB, on a 2.5 SD which is used here, it is hard to have a gradual crossing below the lower band - it usually is a relatively bigger move than the ADR (which is why you see band compression in many cases ahead of the "head fake").

decipherlinda
133 posts
msg #80262
Ignore decipherlinda
9/29/2009 8:50:00 AM

Kevin, brilliant that you're using a wider BB. Bollinger himself says that while +/- 2 standard deviations (SD) usually nets 95% of the data, with stocks he found it only captures about 88 to 89% because stocks do not have standard normal distributions. I was looking at OFG using the standard BB 2.0.

Glad I brought the question up yesterday because I wasn't aware of the idea that a close below the lower BB is usually decisive. Good thought as long as the move doesn't cause the lower BB to go lower. Live and learn! Thank you!

Kevin_in_GA
4,557 posts
msg #80269
Ignore Kevin_in_GA
modified
9/29/2009 9:28:41 AM

Kevin, brilliant that you're using a wider BB. Bollinger himself says that while +/- 2 standard deviations (SD) usually nets 95% of the data, with stocks he found it only captures about 88 to 89% because stocks do not have standard normal distributions. I was looking at OFG using the standard BB 2.0.
++++++++++++++++++++++++

I had posted this earlier in the thread - the settings I currently use are based on an optimization I did using 458 IBD top-rated stocks, going back 2 years. The variables were the MA and the number of SDs used. The program then went back and calculated the profit (after commisions) for all 458 stocks on all combinations of MA (5-25, increment = 1) and SD (1-2.5, increment = 0.1).

There were some very short timeframes that did well, but required a LOT of trading. The combination of 16 and 2.5 emerged as the highest overall when looking at both profit and % accuracy, and had the added benefit of a manageable amount of trades (like 2-3 a week).

Higher SD settings could be even more profitable on a per trade basis, but occur very infrequently (and they are always caught by the 2.5 SD setting anyways).

decipherlinda
133 posts
msg #80274
Ignore decipherlinda
9/29/2009 10:00:35 AM

OFG up 1.81% and RIMM up 1.0% at 10:00 AM. Wow! Very cool!

gabestogie
79 posts
msg #80275
Ignore gabestogie
9/29/2009 10:39:55 AM

Kevin:
Bought the following today:
RMD@44.80
OFG@13.33
CRGN@1.36
BYI@38.19--(I realize this was not a confirmed buy from the original scan, was going to pull the trigger yesterday but held off)
Regards,
Gabe

gabestogie
79 posts
msg #80276
Ignore gabestogie
9/29/2009 11:11:31 AM

Kevin:
Just picked up FHCO@4.95
Gabe

Kevin_in_GA
4,557 posts
msg #80277
Ignore Kevin_in_GA
modified
9/29/2009 11:18:57 AM

ONE MONTH IN ON THIS STRATEGY - SOME THOUGHTS SO FAR

Well, I have been trading this strategy for just over a month now (since August 26th). Obviously started with just two stocks and added gradually as the BUY signals dictated. Thought it was time to look back on my trades and the decisions I made, to see if I can improve my system and my personal discipline.

1. Overall, the system has been a consistent generator of profits. There have only been two days since its inception where the portfolio did not make money - sometimes that might only be a few bucks, but it still is accretive. As the number of stocks have grown to 20+, each day is becoming increasingly profitable. The average percentage gain (admittedly during a nice uptrend) has been about 1% per week, on average.

2. The system backtested well against the time period 11/06/08 through 03/06/09, which to me says it is robust enough to weather any imminent correction we might be facing over the next few months. Here are the results for both the standard BUY version and the version that requires a confirmation before buying (the current version):

BOLLINGER BAND(16,2.5) BUY
Time frame: 11/6/2008 through 3/6/2009
Win%:81%
Lose%:19%
W/L ratio:4.33:1
Reward/Risk: 7.75
ROI: 171.05%
ROI of ^SPX: -86.13%

BOLLINGER BAND(16,2.5) CONFIRMATION BUY
Time frame: 11/6/2008 through 3/6/2009
Win%:96%
Lose%:4%
W/L ratio:23.50:1
Reward/Risk: 44.28
ROI: 247.14%
ROI of ^SPX: -86.13%


3. During the first few weeks of using the system, buying at the close on the day the stock closed below the lower BB was statistically the most profitable approach, versus waiting for any confirmation (close above close 1 day ago). Now that is not the case, perhaps indicating a swing in the market. I now view the system as having two states - one for uptrends, where no confirmation is required, and the other for downtrends where confirmation makes a lot of sense. I still need to figure out exactly when to make the state change, however.


THOUGHTS ON PERSONAL DISCIPLINE

Like any trader, this is perhaps the most important trait to develop in order to be successful. My personal assessment is that I have made quick decisions that do not conform with the system, the result of which have been poor trades. Examples:

1. DL - I bought this one when using a slightly different screen, where I had removed the daily volume requirement. This trade would not have been entered using either current version of the filter, which I was using at the time anyway. Still not sure why. As it stands, this has been a dog of a trade, with volume that rarely is above 10K shares a day. Low volume means that small sell orders can really move the stock price around.

2. RIMM, STEC, and BJRI - bought in on these without waiting for a confirmation signal. On BJRI this might be excused based on when I bought in, but on RIMM and STEC I could have waited and gotten in at a better price.



Kevin_in_GA
4,557 posts
msg #80284
Ignore Kevin_in_GA
modified
9/29/2009 1:01:18 PM

Looks like we'll get confirmation on RIMM today. Up ~2% at 1 PM.

UPDATE: 1:50 PM - RIMM is definitely on the move, now up 2.5% and pretty much in a 45 degree ascent since noon.

Finally I see a confirmation signal on BJRI. Long time coming ... it is currently up 3.25%.

StockFetcher Forums · Filter Exchange · BOLLINGER BAND TRADING STRATEGY<< 1 ... 19 20 21 22 23 ... 39 >>Post Follow-up

*** Disclaimer *** StockFetcher.com does not endorse or suggest any of the securities which are returned in any of the searches or filters. They are provided purely for informational and research purposes. StockFetcher.com does not recommend particular securities. StockFetcher.com, Vestyl Software, L.L.C. and involved content providers shall not be liable for any errors or delays in the content, or for any actions taken based on the content.


Copyright 2016 - Vestyl Software L.L.C.Terms of Service | License | Questions or comments? Contact Us
EOD Data sources: DDFPlus & CSI Data Quotes delayed during active market hours. Delay times are at least 15 mins for NASDAQ, 20 mins for NYSE and Amex. Delayed intraday data provided by DDFPlus