The finest in trend trading

[Merchantprince]

Tymen, this is all pure gold you’re laying down right now. I’ve been looking for a codified set of rules for boll walk entries. I’m sure I’m not the only trader who is often a little late getting in on a squeeze breakout. This is a good set of rules for getting “on the bus” as it is heading out of the station in the first few candles.

It’s really weird how much synchronicity there is this week. I’ve just recently began discussing with another veteran trader here the employment of multiple-deviation boll bands. Now here you are discussing the 1.5 deviation and I actually have a another trading system (very simple) based on 20:1 and 20:1.5 bands (PDF attached).

I found it it quite fascinating and perhaps you might want to consider some of the ideas, if you feel they have merit.

BB on Steroids.pdf (175 KB)

[francisgalvin]

my attempt at answering exc1. I’m prob away off but here is what I thought to be the logical order, I’m just hoping to learn.

RULE 2 - this candle must develop from a squeeze area.

RULE 1 - a BB walk is considered when there is a candle that passes thro the upper/lower BB with its wick or body.

RULE 3 - at the time of this candle appearing, the outer BB must be expanding together, and the mid BB either rising or falling depending on whether there is a long or short BB walk.

RULE 4 - the candles must develop in stepwise function to the upper/lower BB.
The rise must not consist of one only candle rising to the outer BB.

RULE 6 - If the BB does not expand again with the entry candle, then no entry is made.

RULE 5 - After the signal candle (Rule 1), entry is made on the next candle if and only if the price action on this candle passes inwards to touch/go thro the 1. standard dev. BB.
Entry is made upon the touch/pass thro or better.
A 2 contract entry allows the 1st entry to be improved upon with the 2nd contract.

RULE 7 - If, after making entry, the next candle (signal candle, entry candle, next candle) does not show both BB expanding, then a quick exit is made for safety

[RenaLa]

here is my Carousel of rules for the shortcut method to enter on a BB walk only

1 (RULE 2)- this candle must develop from a squeeze area

2 (RULE 4)- the candles must develop in stepwise function to the upper/lower BB.
The rise must not consist of one only candle rising to the outer BB.

3 (RULE 1)- a BB walk is considered when there is a candle that passes thro the upper/lower BB with its wick or body

4 (RULE 3)- at the time of this candle appearing, the outer BB must be expanding together, and the mid BB either rising or falling depending on whether there is a long or short BB walk

5 (RULE 6)- If the BB does not expand again with the entry candle, then no entry is made

6 (RULE 5)- After the signal candle, entry is made on the next candle if and only if the price action on this candle passes inwards to touch/go thro the 1. 5 standard dev. BB.
Entry is made upon the touch/pass thro or better

7 ( RULE 7)- If, after making entry, the next candle (signal candle, entry candle, next candle) does not show both BB expanding, then a quick exit is made for safety

[francisgalvin]

[B]EXERCISE 2[/B]

Spot the entry on the first chart and note the very long distance from the entry to the exit.

The total profit was 59 pips on this 15 min chart.

Calculate the pip rates…

1. how many pips/hour.

2. how many pips/minute.

(1) 26x15min candles if u include opening and exit candles
=6.5 hrs
=59pips/6.5=9.08 pips per hr

(2) 9.08/60m=0.151 pips per min

[richardj]

Now the magnified area to show the entry >>>

This chart shows 4 things…

the outer BB,
the mid BB,
the PSAR
and the 1.5 standard deviation BB (thin line).

At the completion of [B]candle A [/B](black vertical line) we can see that both outer BB are starting to expand and the mid BB is starting to go down.

At [B]candle B[/B], we note that the upper BB is no longer expanding and we cancel entry (Rule 6).

At [B]candle C[/B], (blue vertical line) both BB are expanding again so an entry is again possible.
This entry is made at the 1.5 standard deviation BB as shown on the chart.

At [B]candle D[/B], the outer BB continue to expand so we stay in the trade.

Hello Tymen, reading this post, I have a doubt regarding the Candle C. You say that both BB are expanding again so [B]an entry is possible[/B]. This entry is made at the 1.5 S.D BB as shown on the chart. My doubt is, what is occur first, or better to say, when is formed the expansion of the BB?.

I mean, if the BB are formed after the candle close, at the same time that the candle is forming. My doubt mainly is that if BB are formed after the candle close, you always lose the oportunity to get into the trade because the 1.5 SD BB has already been touched.

May be it is a stupid question, but I sorry, I understand almost everything you teach us, but I am still newbie. The formation of BB still is not clear for me. My impresion is that the BB are under formation when the candle is also forming.

Sorry for my english, may be is difficult to undestand what I want to express.

Regards

[juanchy31]

Hello Tymen, this is what I have down for exercises 1 and 2:

Exercise 1 - Order of rules:

RULE 1 - this candle (signal candle) must develop from a squeeze area.
RULE 2 - the candles must develop in stepwise function to the upper/lower BB. The rise must not consist of one only candle rising to the outer BB.
RULE 3 - a BB walk is considered when there is a candle that passes thro the upper/lower BB with its wick or body.
RULE 4 - at the time of this candle appearing, the outer BB must be expanding together, and the mid BB either rising or falling depending on whether there is a long or short BB walk.
RULE 5 - If the BB does not expand again with the entry candle, then no entry is made.
RULE 6 - After the signal candle (Rule 1), entry is made on the next candle if and only if the price action on this candle passes inwards to touch/go thro the 1.5 standard dev. BB.
Entry is made upon the touch/pass thro or better.
A 2 contract entry allows the 1st entry to be improved upon with the 2nd contract.
RULE 7 - If, after making entry, the next candle (signal candle, entry candle, next candle) does not show both BB expanding, then a quick exit is made for safety.

Exercise 2 - Pip rate calculation:
1)

(26 bars * 15 mins) = 390 mins
59 pips total / 390 mins = 0.15 pips per minute

(26 bars * 15 mins)/60 = 6.5 Hours
59 pips total / 6.5 hours = 9.07 pips per hour

[PerchTird]

Hello Tymen, reading this post, I have a doubt regarding the Candle C. You say that both BB are expanding again so [B]an entry is possible[/B]. This entry is made at the 1.5 S.D BB as shown on the chart. My doubt is, what is occur first, or better to say, when is formed the expansion of the BB?.

I mean, if the BB are formed after the candle close, at the same time that the candle is forming. My doubt mainly is that if BB are formed after the candle close, you always lose the oportunity to get into the trade because the 1.5 SD BB has already been touched.

A seemingly minor detail - with a major consequence, I’d like to comment, but alas , I simply do not know.
I do notice that after the close of the candle in question there is opportunity to open a position immediately -there is also a chance to open a position about the same as what ‘would have been’ -

Edit part below:
it appears that the expansion of the BB, has nothing to do with where price is at - - - - so depending on the ‘programming’ of how a BB works, as far as I know it is very possible for at the point of intersection of the price and the 1.5 BB that the outer BB may ‘point’ outward.

Someone know how a BB is constructed? I guess, just for example, if volume increases, the BB start to expand, so as volume is increasing the price can and may hit the 1.5, expansion has nothing to do with price direction?

sorry sort of babbling.

[DanielMarz]

Hi, I was following this thread for a pretty longtime and i really thank Tymen and all the contributers for your efforts… Seeing how this thread building up and becoming part of my knowledge pool is very encouraging.

I will post my answer’s to Exercise 1 [[B]highlight my thinking process[/B]]:

IMHO…

At the black vertical line, the candle clearly passes thro the upper BB (Rule 1). [[B]This should be the first signal for us to carefully look into this possible trade[/B]]

We are coming from a squeeze area (Rule 2).[[B]then we check if this PA comes from a squeeze area, if not, we abandon this trade possiblity.[/B]]

At the black vertical line, the outer BB are expanding and the mid BB is rising (Rule 3).[[B]confirmed that it is from a sqeeze area. then check for the expansion of outer BB[/B]]

The candles have developed in a nice stepwise manner up to the signal candle (Rule 4).[[B]The expansion BB is confirmed, then pre-requisite is completed by last checking the stepwise form of the PA (i think PA usually does form in this way? no? unless there are some breakout news.:p). now we wait for the entry candle[/B]]

The BB continue to expand at the entry candle (shown) (Rule 6).[[B]If BB’s not expanding at the entry, we keep out of the trade[/B]]

The entry is made when the price action touches or passes inwards thro the BB of standard deviation = 1.5. (shown) (Rule 5).[[B]Enter!!![/B]]

The next candle after the entry shows the BB still expanding so we stay in the trade (Rule 7). [[B]choose to stay in the trade or a quit out if it goes against us.[/B]]

Sorry for any grammar mistakes. Keep learning this method, thanks all!!! Cheers.

[iCarumba]

why i could not use 1.5 std dev in mt4 platform. i can put round numbers only

[francisgalvin]

why i could not use 1.5 std dev in mt4 platform. i can put round numbers only

in mt4 under custom indicators, use Bands and set it to whatever deviation setting you want. i believe this will do what ur looking for.

here’s how:
http://forums.babypips.com/newbie-island/32771-bollinger-bands-2-different-std-deviations.html

[iCarumba]

got it thanks

in mt4 under custom indicators, use Bands and set it to whatever deviation setting you want. i believe this will do what ur looking for.

here’s how:
301 Moved Permanently

[hachiko]

it appears that the expansion of the BB, has nothing to do with where price is at - - - - so depending on the ‘programming’ of how a BB works, as far as I know it is very possible for at the point of intersection of the price and the 1.5 BB that the outer BB may ‘point’ outward.

Someone know how a BB is constructed? I guess, just for example, if volume increases, the BB start to expand, so as volume is increasing the price can and may hit the 1.5, expansion has nothing to do with price direction?

sorry sort of babbling.

PerchTird,
A Bollinger Band is derived from price information, timeframe and nothing else.

To quote from John Bollinger’s website:
"[I]Bollinger Bands are a technical trading tool created by John Bollinger in the early 1980s. They arose from the need for adaptive trading bands and the observation that volatility was dynamic, not static as was widely believed at the time.

The purpose of Bollinger Bands is to provide a relative definition of high and low. By definition prices are high at the upper band and low at the lower band. This definition can aid in rigorous pattern recognition and is useful in comparing price action to the action of indicators to arrive at systematic trading decisions.

Bollinger Bands consist of a set of three curves drawn in relation to securities prices. The middle band is a measure of the intermediate-term trend, usually a simple moving average, that serves as the base for the upper band and lower band. The interval between the upper and lower bands and the middle band is determined by volatility, typically the standard deviation of the same data that were used for the average. The default parameters, 20 periods and two standard deviations, may be adjusted to suit your purposes[/I]"

Tymen has stated a number of times that this thread is for experienced traders. Whilst that does not mean the newer traders should not use these methods, it is extremely important that newer traders understand how these indicators are derived. Unless traders know where the indicators come from, making an informed decision is difficult (if not downright risky).

There are a numerous reference sites on the web. Just Google

[erikskenne]

[B]It is sad news that I have to say that I am starting to suffer from a higher level of depression, which I think is caused by living in this small town where I am. (I returned to Perth briefly the other day and wow, what a lift!!).[/B]

As such, I am trying to persevere but coming under a lot of strain. :eek: :eek: :eek:

There is one thing that all readers can do for me…

When there is a question (chart or otherwise), please answer it so that I do not have to do it.
This takes an enormous strain off me (you have no idea how much!!) - and every answer I have seen so far from posters has been excellent and completely accurate.
After all, we are not dummies!!

It is only when there is a dispute or correction needed that I will intervene.

It is now time to look at a nice little shortcut to the DNA method.

That is, we can trade the most efficient part of the whole method, the BB walks all on their own if you wish.

We already have the best exit method - the PSAR/mid BB approach.
I now need to post the rules for entry of a BB walk - there are not many, but they are extremely specific, and if not rigidly adhered to, will see almost immediate failure.
We can then look at a multiple contract method for this whole idea.

[B]I envisage that this will be most likely my last work on this thread.[/B]

After this, we need to look at getting the PDF’s together.
There will be more than one of them because there is a limit to how much you can upload on this forum.

Since it is now ending July, I see that by September the development of the PDF’s needs to be underway.
Much editing will be required before the final work is produced.
But I intend to see this thread end on 15th November when I rest for the year.

The PDF’s will be in great need because we have an increasing number of beginners coming on this thread and wading thro 400 pages - too much.

I envisage the following…

1)Examination of a trend and use of the Bollinger bands in place of S/R lines.

2)Introduction of the BB bubble and sausages.

3)The CBL and how it is used.

4)The DNA method itself - the 4 types of price action.

5)How to trade the DNA method with the CBL and multiple contract entry.

6)The danger of the no trade areas and why they are so called.

7)The best of the trades - the squeezes.

8)The quality exit - the PSAR/mid BB approach.

9)Shortcuts - a quality entry method for BB walks and a multiple contract approach to go with it.

Several PDF’s will be needed to include all this material.
Once finished, they can be posted and this thread closed.
(as always I ask that it also be locked).

[B]As the time approaches for construction of the PDF’s, I will be calling on the skills of Merchantprince, DodgeV83, IronHeart, for the technical stuff, NForex for the graphics, Graviton for any further counsel, and any others who wish to contribute, since all are welcome to do so.

I myself will look after the written presentation, my teaching forte.[/B]

Tymen I do really think that you should take good care of yr health! If it’s a depression comming on, just stop were you are and relax, you have done so great so far that yr “turtles” can crawl at their own for a while. I have read every single post in this thread and I,m very greatful to all of you who have contribute to make this what it is. It will take me long time to digest all this information, and I shall enjoy all the time and hopefully somtimes in the future I will benifit, At least I hope so.

[erikskenne]

I’m always willing to make amendments to any BB DNA documents if Tymen feels they are warranted. He hasn’t yet averred that your edits ought be implemented.

MP I tried to contribute on yr chat but I failed, I try to send msg several times, It did not work out well, pls advice how I should do it, Thanks for yr work with the Pdf’s

[Merchantprince]

MP I tried to contribute on yr chat but I failed, I try to send msg several times, It did not work out well, pls advice how I should do it, Thanks for yr work with the Pdf’s

Erik, all the registration is handled by the Ning network people; I’m not sure what your problem is without more details but I would suggest using the support links during registration to get some assistance.

On a happy note, we just reached a milestone on the BB DNA chat of 200 members! The chat room is alive and active every day, even during the weekends.

[francisgalvin]

@tymen1

I am still working on those shortcut rules…

But added to the 4 rules I gave already, (#4075 page 408) we have these >>>

RULE 5 - After the signal candle (Rule 1), entry is made on the next candle if and only if the price action on this candle passes inwards to touch/go thro the 1. standard dev. BB.
Entry is made upon the touch/pass thro or better.
A 2 contract entry allows the 1st entry to be improved upon with the 2nd contract.

if the pa touches the 1 std dev candle after skipping the candle next to the signal candle, is that a still a valid entry?

I’ve attached a chart to try explain my question.
it’s eu h1 at 6am gmt on 29/7/10

having trouble loading the image correctly

[tymen1]

if the pa touches the 1 std dev candle after skipping the candle next to the signal candle, is that a still a valid entry?

I’ve attached a chart to try explain my question.
it’s eu h1 at 6am gmt on 29/7/10

having trouble loading the image correctly

Very good point.

Answer - Yes, it is!!

[DanielMarz]

Hi all, did everyone had a good time this week.? Tymen, i hope that you turn better day by day! I was reading Carl Gustave Jung’s book <<Memories. Dreams. Reflections>> … which helped me to understand myself a little bit more… I think you might find out some answers from that book…

Please check out my last trade… I entered too close to the Mid-BB. So i picked the outer BB as TP1. That turned out to be good! But the candle continues to develop and hit the 3.3 BB. Then i recalled tymen’s method (exit when PA hit the 3.3 BB) and exited at TP2… which leads to the MISSed long BB walk!!

Just want to examine if i did it right. Anything i missed here? or i will catagorize it as “You can’t catch every BB walk, can you?”!

Thanks, Can i has some pips…

[Redhunter]

You werent using the psar, which is used in conjunction with the 3.3 BB exit.

No inversion, and ‘re-version’ , to be seen on your screenshot.

You didnt follow the rules.

Re-read his rules regarding exiting, and entering, along with the new rules.

Should help you catch more walks.

Good job on getting pips so quickly.

More pips to ya!

Red

[didilut]

@tymen1

I am still working on those shortcut rules…

But added to the 4 rules I gave already, (#4075 page 408) we have these >>>

[B]RULE 5 - After the signal candle (Rule 1), entry is made on the next candle if and only if the price action on this candle passes inwards to touch/go thro the 1. standard dev. BB.
Entry is made upon the touch/pass thro or better.
A 2 contract entry allows the 1st entry to be improved upon with the 2nd contract.

RULE 6 - If the BB does not expand again with the entry candle, then no entry is made.

RULE 7 - If, after making entry, the next candle (signal candle, entry candle, next candle) does not show both BB expanding, then a quick exit is made for safety.[/B]

Tymen, just a clarification please do:
Is the candle 1 is good signal, or is it the candle 2 ?
Thank you in advance.
Regards, Didier.