I think this is a very good point. It might be best to stick with the daily chart because if you stay with the monthly chart, chances are that you’ll miss the boat on the move. Perhaps it would be best to just stick with daily charts and then zoom in to the 4-hour or 1-hour for entry points. Maybe use the weekly chart to see if price is testing S|R levels.
Thanks for the links, I’ll definitely take a look.
Btw, I just started reading a book called Bollinger on Bollinger Bands. I figured since it was written by Bollinger himself, might as well get more insight. So far, so good. If you haven’t read it yet, I suggest going through it.
I’m assuming you got in on the top of this USD/CAD move? Technically, using the parameters of SD 2.5 and 3.0, the candlestick didn’t close within the range. Or are you using different parameters?
Did you hold on? If you did, congrats!
Keep up the Great work S1L1K0N would be interesting to hear if you have anything to add.
I thought I would include this link even though it is only a single bollinger band system but it concentrates on reversals:
There is a downloadable pdf at the top of the page. A few fake outs but I imagine overall the profits would be greater than your losses.
Good luck!:53:
Sorry to respond so late as I was out of town over the Canada Day long weekend. With regards to the USDCAD trade, here’s a picture which shows where I entered; notice that the candle on my platform for the day you mentioned closed within the 2.5 and 3.0 SD range. My broker is IBFX and they use Metatrader 4. They are a 5-digit broker which is why the spread looks so big on the chart.
I didn’t hold on to the trade until it ran it’s course, I’m not sure how to set up a two-position trade (one where I would hit the TP @ EMA and still have a trade open to let it run out).
Here’s a couple of SELL trades that I am currently in. I started both late because I wasn’t around my computer much on the weekend, but because it’s ‘funny money’ on a demo account I took them just to see what would happen.
The EURUSD trade is currently up ~36 pips, and the AUDUSD is also up ~36 pips.
I actually entered that AUD/USD trade into the trade of the week contest but using SD 1 and 2 haha.
I actually got a long USD/CAD signal over the weekend and entered earlier this week. This was using the 2.5 and 3.0 SD paramaters. It’s also at the .9600 handle. You plan on taking that?
Btw, S1L1K0N, you can just put on two half positions. Both will have the same SL, but one can have a PT at the middle of the channel and the other at the bottom … unless you’re using an EA that puts in automatic orders? I’m not so familiar with EAs. 
I didn’t go long on the USD/CAD as I didn’t see very much volume in the previous bars when the price was dropping which is supposed to signal that there wasn’t any buyers out there. Check out the 1500 pips a month VSA thread for a better explanation of what I’m talking about; I’m no expert on it but I find that using volumes gives you a better picture of what might be going on.
With regards to half-positions, I’m not sure if this is possible in Metatrader 4? I’ve never seen it on the buy/sell screen. Sounds interesting though, good way to cover your bets.
I meant to say, just put to orders in, with each being half of your normal position. Let’s say you normally trade 1 lot per trade. Instead of going with one position with 1 whole lot (100,000 units), why not two positions with .50 lot (50,000 units) each.?
I did some reading on bollinger bands (reading Bollinger on Bollinger bands pdf), and one section was dedicated to how you can use BBs to help spot double tops/ bottoms, and other reversal patterns.
One tip that Bollinger gave was that if price pushes past the top BB on the first high, and then makes a new high in price but fails to close above the BB, then the 2nd high is relatively lower than the first high. What I understood was that even though a new high was made, there was less volatility that pushed it higher, so we could see a move lower soon as a double top has formed.
Sorry that was a little confusing but I don’t know how else to explain it.
Anyway, I found a similar setup on NZDUSD and decided to put on the MACD indicator as well. There seems to be bearish divergence, as price has made repeated highs, but the highs of the MACD are going lower and lower. If i’m not mistaken, as MACD also measures momentum, so this could indicate that buying momentum is dying (please correct me if i am wrong).
I decided to go short at market at around .8255. I’m going with a 100 pip stop (greater than the daily ATR). I’m actually aiming for the bottom of the range at around .8000. Now, I might be wrong as this could be one ugly double top… or it could just be a rising channel. haha anyway its on demo, just a potential trade idea. let’s see if it works. need to keep reading.
That could work, but then you have to pay the spread twice…
I closed the two trades I was in when I noticed the volume go higher than the previous few candles. I ended up a total of 60 pips (35 on the EURUSD, 25 on the AUDUSD). I haven’t taken any more trades this week, and looking at the graphs it’s doubtful I will.
It’s kinda funny how the EURUSD is right in the middle of it’s recent range; the big/smart money is just waiting to see what happens in Greece and Portugal I guess. I haven’t looked to see if there’s any big news coming up but one of the nice things I noticed about the daily charts is that they filter out a lot of the big swings - you just gotta have patience and not want to trade as often.
Half position means half spread costs too!
You have to make sure on this that your RR is very good. I used to use bollinger bands a lot and the biggest weakness of them IMO is that you can get caught ina trend that you are continaully betting against. For example, if price keeps riding upwards, stopping you out, and then going past the 2.5/3 SD, do you enter again or do you wait for a few candles? If you enter right on the 3SD, chances are that it will mean revert a bit but it won;t always be back to the middle band.
I understand what you’re saying. That’s exactly what happened when I was backtesting. There were a buttload of losses, but there were some winners that made up for them. Also, there were a lot of winners that would give less than 1:1 RR because the middle band would move up / down depending on the trend.
I’ve actually been reading up in ways to use Bollinger Bands as a trend following system. Basically, going in the direction of the breakout of the squeeze.
I’m also interested to know how bollinger bands work on an intraday basis. What would be the best parameters to use on the 1-hour / 15-min charts. From what I’ve read, the standard 20 / SD2 work on the daily. Would they be okay on the lower time frames as well?
The principle is the same but anything on lower timeframes involves more trades, more stop outs, more whipouts and suffers from intraday news releases. Do yourself a favour if you are going to follow this method and use Daily charts only.
So if I were to use Bollinger Bands for picking tops and bottoms, I should stick to daily charts. Alright.
What about if I wanna do intraday trading and “walking the (BB) lines”. For example on breakouts, etc, would it still be okay for 15-min chart? What would be the best parameters for an intraday BB system?