Bollinger band trading with MAs

[John4pips]

I see this every Sunday:
opening gap
gap fills

I’m considering just trading that every Sunday for 30-50 pips as a side strategy - want to backtest this a bit though as I’m sure there are times it gaps and doesn’t fill.

Yeah.this may be the good idea.What is your best strategy on sunday?

[John4pips]

Ok from reading some posts I notice some may be placing trades on the 1h chart and closing when PA goes against them by a few tens of pips? The problem here is if your placing a trade on the 1h chart and following the 1h chart the trade should last around a 1-2 days.

On the 1h chart, forgetting the MA’s for a minute and just looking at the bollinger bands. Say you wait until PA has broken the upper 2 std dev bollinger line and has wicked in between the 2 & 3 upper bollinger line. This might be a good place to place a short trade, especially if the center line bollinger band is horizontal or starting to slope down.

Ok we are now in a short trade on the 1h chart. If we are trading this 1h chart we will probably remain in this trade typically 1-2 days.

Now we look to either the 5m or 15m chart (I prefer the 15m). Where is PA in relation to the 2 std dev bollinger on this chart? Should be in the upper area as you have just entered a short on the 1h chart in the upper boll bands. Ok now we follow PA on the 15m chart. We are of course ok with PA heading south as our 1h trade is short. But when PA hits the lower 2 std dev bollinger on (in my case) 15m chart, I will look to see if its going to retrace. [B]If it starts too, I will place a long hedge. If you don’t have hedging capability you might want to close the trade. A hedge will only ever cost you the spread[/B]. If PA retraces up against your longer term short 1h trade your saving lost pips. If you get it wrong its still in real terms has only cost you the spread and virtual pips you would have otherwise gained had you not hedged. In other words its a safe counter trend trade.

When PA resumes the longer term down trend you take off the hedge or re-open your position. This is the way to trade the 1h chart.

The other way is to trade the 5m or 15m chart. In this case you open a trade in accordance with the bollinger and close the trade in accordance with the bollinger. You can of course use the 1h for guidance of when to enter a trade on the 5m or 15m chart.

If your trading the 1h chart you must except that PA can move the full range of the upper/ lower bollinger whilst still heading in one overall longer term direction. Likewise with the 5m and 15m chart. The key difference on trading the 5m and 15m charts is that the pip range is less.

If you look to my 1h short trade that I placed last night PA has retraced by around 50%. Had I been on the ball I would have placed a long hedge on the 15m chart to offset this retrace.

Might help if you go to 200% on the word doc attached to see it better.

RC,
You mean you will used these bold statements as contertrade? I am not completely getting what you were trying to say there.
Thanks.

[Mgsupra101]

John im gonna try RC’s London Breakout 1 strat tonight and see how it goes. Its pretty basic and could get myself moving in a upward pip gaining direction possibly if I do it correctly so I figured why not see if you wanna try it out with me since were both still having problems with the more co-current strategy. Although I am starting to get that one as well

Mike G

[John4pips]

@Mgsupra101

John im gonna try RC’s London Breakout 1 strat tonight and see how it goes. Its pretty basic and could get myself moving in a upward pip gaining direction possibly if I do it correctly so I figured why not see if you wanna try it out with me since were both still having problems with the more co-current strategy. Although I am starting to get that one as well

Mike G

Yeah.It is a good idea.I have looked at it sometimes and it is almost a nice strategy.But there is an in-built caveat in this strategy i noticed.
It says "If a trader sees, for example, no swings high in the 5 candle range, that means there will be no downtrend trend lines this morning."So, i dont trade it more often.
Besides,I am looking for fewer strategies but more of the basic understanding of what makes PA moves in the way it moves than jumping from one trade strategy to another.My mindset is that to get the fundamental first and profit will follow because success takes time.
Let me know as things unfold.
John

[John4pips]

@cas

Yeah, you will. It comes with practice.

I dont think it comes with practice.It is more of fundamentals than practice.I do encounter this myself.

[R_Carter]

RC,
You mean you will used these bold statements as contertrade? I am not completely getting what you were trying to say there.
Thanks.

Yea I can explain. If like today I’m on a 1h chart and was going short as I was :mad: based on the center line bollinger coming over the top.

So my longer time chart position was short. Typically 1-2 days. But if PA takes a retrace up on the 15m chart, I will hedge this move on a counter long trade. This means I have effectively frozen (one cancels the other out) the trade at the start of the retrace on the 15m chart. If say it retraces 50 pips I have saved loosing these pips. Now lets say PA starts to head south again. I take off the hedge and my 1h short trade is now back in play. Price typically zigzags. So on say a 300 pips drop in price it might overall retrace 100 pips. If I can catch the retrace I have effectively made 400 pips total on a 300 pip down move.

Only problem is that sooner or later PA will head counter to your longer term trade. So the hedge becomes counter productive. In effect yoy have to switch the trades. The hedge now becomes the longer term trade and the longer term old trade is now the hedge. JUST LIKE TODAY IN FACT!

[R_Carter]

I’ve now switched back to a 4h chart… where the center line boll is and has always been up! :D:D:D

[Mgsupra101]

Im gonna give this a go Carter. I can start this strat right now correct?

P.S. I still wanna try your london break strat also. it Seems very promising I’l just have a few questions to ask you once I can get a chart posted.

Mike G

[d-pip]

I’ve now switched back to a 4h chart… where the center line boll is and has always been up! :D:D:D

RC and others,

On the 4h the stoch fast/slow lines look as confused as I am. Do you think we could be at a tipping point, not just GBP but all the markets, oil, gold etc and even the big players don’t have confidence as to which way the markets will go next?

[R_Carter]

Im gonna give this a go Carter. I can start this strat right now correct?

P.S. I still wanna try your london break strat also. it Seems very promising I’l just have a few questions to ask you once I can get a chart posted.

Mike G

I have 4h charts up and a price line (not candles) a 2 std dev bollinger and a regression line set to 5. Plus S/R lines. Thats it. Currently the 4h chart PA and center line boll is up. Upper bollinger line is around 50 pips away.

I use a 15m chart to take a hedge if and when its warranted.

Not about to tell you when and if to get in but the same principles apply to all time charts.

[R_Carter]

RC and others,

On the 4h the stoch fast/slow lines look as confused as I am. Do you think we could be at a tipping point, not just GBP but all the markets, oil, gold etc and even the big players don’t have confidence as to which way the markets will go next?

Were well off topic here. But the Dollar seems to be taking a big hit. Gold at a record high, Oil forcast to rise. GBP and EUR up! I’m no analyst… better ask Clint.

I just trade the charts, PA is always right! Not a big fan of analylists.

[Mgsupra101]

Hey carter this is gonna sound pretty noooobish but when you watch PA…what are you watching…theres no such thing as a PA indicator right?

Mikeg

[TalonD]

well for what its worth, I gave up on a turn south and I’ve got a long going. hmmm

[Mgsupra101]

well for what its worth, I gave up on a turn south and I’ve got a long going. hmmm

Im not touching anything until I have all this figured out… lol

Mike G

[R_Carter]

well for what its worth, I gave up on a turn south and I’ve got a long going. hmmm

I just can’t help playing Jerry Rafferty’s ‘if you get it wrong you’ll get it right next time’ on youtube about this time of night. Not the best start for the week for me… hehe!

[John4pips]

@R_Carter

I just can’t help playing Jerry Rafferty’s ‘if you get it wrong you’ll get it right next time’ on youtube about this time of night. Not the best start for the week for me… hehe!

RC,
I think i now realised where the confusion coming from.You guys are trading Advanced Trend Line with SSD while i am still trading BB with LWMA.No wonder i did not flow with the direction.

By the way,where do you get SSD? I only got Stochastic Oscillator on my Metatrader 4?

[John4pips]

Yea I can explain. If like today I’m on a 1h chart and was going short as I was :mad: based on the center line bollinger coming over the top.

So my longer time chart position was short. Typically 1-2 days. But if PA takes a retrace up on the 15m chart, I will hedge this move on a counter long trade. This means I have effectively frozen (one cancels the other out) the trade at the start of the retrace on the 15m chart. If say it retraces 50 pips I have saved loosing these pips. Now lets say PA starts to head south again. I take off the hedge and my 1h short trade is now back in play. Price typically zigzags. So on say a 300 pips drop in price it might overall retrace 100 pips. If I can catch the retrace I have effectively made 400 pips total on a 300 pip down move.

Only problem is that sooner or later PA will head counter to your longer term trade. So the hedge becomes counter productive. In effect yoy have to switch the trades. The hedge now becomes the longer term trade and the longer term old trade is now the hedge. JUST LIKE TODAY IN FACT!

Awesome. I will save this in my record.I keep learning daily from you.Good to know that you and Sanmiguel are there to help us out as always.Keep up the good work.
John.

[John4pips]

I’m waiting for a definite close above 1.64 before deciding, I’m still with the view of a short but this isn’t following the MAs, just based on SR.
You should read all the forum posts on different sites about GU at the moment - 50% opinion to sell the hell out of it, others are going long etc. etc. -

Hey,
I only saw one or two of your posts today.Hope all is well with you.
John.

[Mgsupra101]

Placed a short at .6405 lets see how it does considering we just crossed the center boll on the 15m chart.

Mike G

[John4pips]

Placed a short at .6405 lets see how it does considering we just crossed the center boll on the 15m chart.

Mike G

Mike,
Which system are you using, Adavanced Trend Line or BB with LWMA?