I don’t have a lot of strategies to try out but I have to start somewhere. I found this strategy called BBMA. And its in Malay so I’ll translate a bit and summarize it.
[B]BBMA Trading Bot[/B]
Indicators to use:
[ul]
[li]Bollinger Band[/li]
[li]Moving Average[/li][/ul]
About Bollinger Band
The Bollinger Band has 3 parameters, the Top BB, the Mid BB and the Bottom BB. As he explained it, it’s more of a Support and Resistance measurement from time to time.
If the BB expands, it means that the market movement is [B]strong[/B].
If the BB contracts, it means that the market movement is [B]weak[/B].
The weak BB only happens after a massive strong movement (or so the patterns indicates). This made me learn that a weak BB isn’t a good time to trade.:51:
The Top BB acts as the Resistance if the price is below it, which in turn, makes Mid BB as the Support.
If the price is below the Mid BB, it becomes the new Resistance and the Bottom BB turns into the new Support.
About Moving Average
In his strategy, he uses several MA’s to determine the entry and exit, also acts additional support and resistance as confirmation.
Indicator Parameter Settings
[ul]
[li]MA, Linear Weighted, Period 5, Shift 0, Apply to Low, Color White.[/li]
[li]MA, Linear Weighted, Period 10, Shift 0, Apply to High, Color Yellow.[/li]
[li]MA, Linear Weighted, Period 10, Shift 0, Apply to Low, Color Magenta.[/li]
[li]MA, Exponential, Period 50, Shift 0, Apply to Close, Color Aqua.[/li]
[li]BB, all default.[/li][/ul]
From the look of the chart, immediately I can see that it’s going down. I would place a sell here and exit with 100 pips. But I’m not gonna do that as the goal here is to make a trading bot that does it for me.
Oh and I was supposed to set up to see 3 timeframes at once, so M15, H1 and H4, tiled vertically.
No-no Conditions
[ul]
[li]MA5 and MA10 High cannot be above the Top BB.[/li]
[li]MA5 and MA10 Low cannot be below the Bottom BB[/li]
[li]Candlestick cannot close outside of the Top BB or the Bottom BB.[/li][/ul]
Yes-yes Conditions
[ul]
[li]Make a sell entry only from MA5 and MA10 High [/li]
[li]Make a buy entry only from MA5 and MA10 Low[/li][/ul]
BBMA Entry Conditions
There are 3 kinds of entry conditions:
[ol]
[li]Extreme[/li]
[li]Market Loss Volume[/li]
[li]Re-entry[/li][/ol]
Extreme Entry
This is defined as the following:
[ul]
[li]Moving Averages are above the Top BB or below the Bottom BB and;[/li]
[li]Candlestick closes outside the Top BB or the Bottom BB.[/li][/ul]
Normally, the candlestick and MA cannot be outside of the BB because it usually plays inside the BB range. BB controls and follows the price from time to time. Whenever price successfully penetrates the Top BB or the Bottom BB, it broke the conditions and will be taken shape of the Extreme shape.
[ul]
[li]Extreme Sell - MA5 and MA10 High are outside of the Top BB[/li]
[li]Extreme Buy - MA5 and MA10 Low are outside of the Bottom BB.[/li][/ul]
Market Loss Volume
This is defined as the following:
[ul]
[li]A reversal happens[/li]
[li]Formed after an extreme buy or extreme sell[/li][/ul]
And it is only valid when the price did not close outside of the BB eventhough its a shadow (not sure what that meant. Something about a candlestick shadow?)
And not valid when the price did penetrate and close outside of the BB.
Re-Entry
This is defined as the following:
[ul]
[li]Formed after an extreme buy or extreme sell[/li]It will look like its going sideways or ranging.
[/ul]
Now looking at doing re-entries is quite challenging but I’ll try the first 2 entry strategies. My exit strategy is simply put a TP for 100 pips and a SL for 100 pips as well.
Next, I’ll post what the strategy tester report says about this strategy.