The first two trades are self explanatory and only get to TP1.
The 3rd trade uses 2 candles for the CBL but this gets very close to the mid BB.
So we cut the total in half and set the CBL that way.
Again only TP1.
The 4th and last trade is a loss and needs close attention.
A single CBL and the trade goes against us with the BB expanding.
Now we can see that the BB are expanding and we can see that the candles are going to do a BB walk on the lower band.
So we get smart and exit early before our stoploss.
This chart shows 5 trades and needs a good deal of explanation…
1st trade :
This involves an extreme yellow candle and its 2nd candle marked A.
The pair go way past the mid BB, therefore, cut in half (blue lines).
Entry at the next red candle and goes to TP1 at the next yellow candle marked B.
The candle B retraces and we get TP1 only.
2nd trade :
Candle B retraces way past the stoploss of candle A, thus forming a new extreme candle.
It is also a very long candle and is cut in half. (blue line).
TP1 and TP2 follow.
3rd trade ;
This trade entry and stoploss are simple but the entry is made after the opposite BB contracts.
After this the trade backfires and we see that happening with a dropping mid BB and a lower BB walk coming up. We get smart and exit the trade before the stoploss line.
4th trade :
This long trade is self explanatory and is an excellent trade.
5th trade :
This short trade is self explanatory with TP1 showing only.
It does not hit TP2 - instead the price action goes back to the upper BB.
Our first trade is a short trade and the 2 candles combined go well past the mid BB - so cut in half then enter on the next candle (red).
This candle hits TP1 AND TP2 all in one go - fast profit!!
Our next trade is a long trade - the red extreme candle gives no entries.
By waiting we find a new extreme candle and enter when the opposite BB contracts (we are entering a slight bubble).
TP1 and TP2 are self explanatory …but…
Look what we miss out on!! :eek:
A whole walk of the upper BB.
(sigh)
We MUST stick to our trading rules.
At the exit of TP2 shown on the chart, there is no way of knowing that a BB walk was coming.
Had we known, we would have held on to the trade.
But we did not know.
So we exit.
We must be content with what we get out of the trade.
Next time will be better.
Remember - this DNA method is a high win/loss method, not a high risk/reward method.
The way to prosper with this method is to put on high lots, since the trades are short and sweet…and very reliable!!
I have not come anywhere near finishing the trade sequence compared to the 4 hour section.
But we have already made more pips than the whole of the 4 hour timeframe section.
We speculate that as you go down in timeframes, more and more pips can be made.
However, the lower the timeframe, the less the pips between the upper/lower BB.
So I conclude that there is a happy median timeframe which produces the most pips with the Bollinger DNA method.
Since I know nothing about backtesting, I do not know what that timeframe is.
But I suspect that it is shorter than the 1 hour timeframe - we are possibly looking at a 20/30 minute timeframe.
Today in MP’s chat room someone was expressing doubt about using the “cut the extreme candle in half” method. I have no idea how you came up with this, but I’m getting great win/loss ratios, and using multi-lot, great risk reward ratios using this method. It seems that when price reverses so strongly and forms a CBL in this situation, there is enough momentum that the vast majority of time it will make it on up to the TP points. Odd that something that seemed to me as almost an afterthought at the time, works so darned well. Congrats Tymen on seeing that. I doubt anyone else ever would have thought of it
H4 gives reliable profits on pretty much all pairs.
Go to the Daily chart and it’s virtually impossible to lose on any pair, using orthodox CBL, 1xCBL, 2xCBL, 100% PCI stop, 50% PCI stop and various levels of profit taking at TP1 - any combination. Some work better, some worse, all profitable.
You might only get 10-20 trades a year on the Daily chart, but that’s per pair. Trade 10 pairs and that’s 2-4 trades per week, enough to keep you busy.
I cannot get a backtest to show profit at M30 over a 12 month period, on any pair.
Hi Dodge, as you can see, your EA will work with my broker "ActivTrades.
I just saw you we had made another version, I do not have fully understood the operation, I will try to use it, and if I do not, then I rely on your kindness to give me some further explanation.
I am a disabled language because I am not bilingual, and sometimes I have difficulty understanding the nuances of English.
Thank you to you for this great job which allows us, everybody, to truly enjoy the excellent method of our Master Tymen1.
Regards, Didier.
The idea is to smell out the BB walk, much like a sniffer dog!!
What we do is watch the mid BB closely.
Even the slightest hint of the mid BB going up or down together with even the slightest hint of the outer bands expanding gives us reason to delay the exit for just one more candle or even part of a candle.
If the evidence for a BB walk then increases, we delay our exit even longer… until it becomes rather obvious that we are on a walk.
There is nothing wrong with closing the trade early even if we miss out on the walk - it just means we forfeit those extra pips.
Thanks for the feedback NB! I’ve attended trading training classes where after several days of training on the same system a group of 20 traders are released to trade for a day. At the end of the day, all 20 traders had slightly different results depending on pair selection, timeframes traded, and small differences in the implementation of the system.
I also have had very good results with the 4 hour and daily time frames, but I know others have had good results with time frames all the way down to 2 minutes. I think this system has great potential, but I encourage any new traders to trade it in demo until they are comfortable with it and are obtaining consistent results.
Thanks again for reporting your findings. I’m sure this is helpful to many.
Tymen Hello, just a silly question:
Where is the correct input on the candle with a small body, and 2 large shadows?
No one close to mid BB
No. 2 has half the body of the candle
No. 3 has half the entire candle with shadows
Now if you could just incorporate Tymen’s orthodox CBL rules, an option to use ATR % for SL setting and combine this with BB Squeeze to find areas where BB’s are contracting, this will be the EA to rule them all.
