knowing when to put on my position, i wait until the market hits the upper bollinger band and then get short. the problem lately is that it seems i am entering my position to early because the market ends up blowing right past me. Sometimes it comes back but usually i dont wait to find out. Any suggestions?
No indicator will work consistantly by itself you need to use at least one more at the same time to try and confirm the position is good.
John Bollinger was the one who stated that a touch of the SD bands is not a signal unto itself. You should look for confirming evidence that price is going to bounce.
Did you backtest this method ?, if so was it profitable ?
A very good thing to do is try to figure out the general trend, as the old saying goes “The TREND is you Friend”. No matter how long its trending in one direction, still follow it. Keep in mind that even with indicators there can be a series of lost, therefore you need Money Management strategy. Also don’t stray from your strategy, you just might have a series of wins, carefully plan your win/loss ratio. I use to lose alot by changing strategy each time and when I change the old one starts to win then I discover that with a good Win/Loss ratio and proper money management I will do well, now I’m winning all the way, I just set my orders confidently and leave it. Now while I wait for my trade to complete, I sit and practice how to make the strategy better or how to add a new strategy to what i already have.
What you’ll want to have is one or two other indicators to back up that BBand, I suggest RSI and MACD, but you should use what works for you.
Make sure to keep an eye out for chart patterns!
never catch a falling knife…
bollinger bands don’t work.
actually, let me rephrase that. they CAN be useful, but i have not found them to be useful!