I have just tested a system and make 135 pips/day using different currencies.
Please test it and give me response.
Time period: 4h
Indicator: Bolinger Band (default settings)
Indicator: MACD (12,26,9 ) (default settings)
See attached image for more clarification.
Strategy:
1- highest and lowest bands of Bolinger together
2- MACD crossing.
I don’t get it.
Highest and lowest bands together?
Watching but don’t see it, please show it to me again.
Regards
Tried it today on a whim. Then forgot all about it (demo), came back and was in profit.
Will test some more.
When do you close your open positions??? This seems to be good for entering trades, but what about exiting?
What’s with that second set of bands? Looks like bollinger bands and something else as well(those square steppy looking bands).
Looks interesting though.
Cheers,
PKFFW
Yea i know what you mean pkffw, i have never seen that configuration anywhere before…perhaps it is particular to that charting package…I have however seen a system like this before.
It is similar to a system that was put on here a few months ago, it could have been one of James’s actually.
Although there [I]are[/I] differences, firstly the other system used MACD crosses and PARABOLIC SAR…i forget the settings :S…this one uses the BOLLINGER BANDS at their narrowest point…i suppose it is the same sort of thing, a confirmation after the MACD cross.
The theory behind it seems pretty sound, we know that when MACD crosses is it indicative of a potentail big move or reversal…and we know that when the BOLLINGER BANDS contract to their lowest point, it is indicative of price consolidation…which in turn usually resluts in a breakout one way or the other.
I am interested in this…will demo it for a couple of weeks and let you all know how i get on 
May the pips be with you 
Highest and lowest band of “Bolinger” should come closer. (Means together)
In other words, distance of highest and lowest band of “Bolinger” should be narrow.
You can see Attached image in my first post. I have pointed out Highest and Lowest band of “Bolinger” at left side of image.
burhan thanks for telling us about this. I like strategies that are simple to use. Maybe someone can do some backtesting to give us an approximate idea of how performs over the long term.
When price makes nice swings and trends, you could probably follow MACD by itself and be profitable. But what happens when price starts to range how often will the BB give you false breakouts signals. In other words right after you enter an apparent BB expansion, how often will price reverse and hit your stop loss.
hi burhan…
can you share with us what charting u use ? how do i get the same chart like yours ? i am still consider a newbie…
please help…thanks in advance.
He’s using VT Trader. Visual Trading Systems, LLC
VT Trader by default plots those high/low bands on all charts but they can be disabled if they become confusing when not part of your trading system.
hi burhan…thanks for your fast reply…
Hmm however i am still abit confused of your picture…
the highest and lowest…how narrow is it then we sell ?
can you kindly draw on the picture and upload here ? thanks alot;)
Hi burhan,
It’s an interesting strategy that looks promising from your charts. I will try it on a smaller time frame so I can use a smaller SL.
When you were averaging the 135 pips/day on 4Hr charts, what stop loss did you use and what do you estimate your winning percentage was?
How many currencies were you monitoring per day to achieve the 135 pips?
1- i normally use $80 Stop Limit. But till now, i didn’t lose any trade.
2- I am trading with 3 currencies. And those 3 are EUR related pairs. EUR/JPY is most important for me.
I didn’t get profit in 1 day. Positions can open for more then 2 days. But overall profit is approximately 135 Pip/day.
burhan, can you plz explain abit more detail for us here ? thanks again.
Hi everyone!I am a newbie and just have a question regarding MACD lines. I use the MT 4.0 platfrom and when i clickinsert, indicators, oscillators then MACD, i have the default settings at Fast EMA 12 Slow EMA 26 and MACD SMA 9 (default settings) Click OK. My question is, on my chart i only have ONE MACD Line, How do you get TWO MACD line so i can see them crossing?
Thanks.
James
I think this whole idea appears a little suspect. When is the BB band wide and when is it narrow? What is narrow at one place may well be wide somewhere else on another day.
Absolutes are required here. A numerical definition of when the BB is narrow and when the BB is greater than narrow would be much more helpful. I feel that as the system stands it could well fail you because it is based on subjective observations.
Regards, Tymen Wortel, Perth, Western Australia.
Hi Burhan,
Nice sys u got, but like you said it has to be back tested. About the pairs you’ll be trading, do you close your trades everyday and also wen you say you put a stop loss of $80 is that on a standard account or mini.
Well I’l try back testing on demo and would drop my experiences.
cheers
I am not at home or i would give you the link to download the “true” MACD indicator. You could just goolge true MACD indicator and find it from there. Then just put it in your indicator folder in the mt4 platform you are using.
Hi burhan,
Have you done any more testing or refinement of this BB strategy since your original post?
