Bollinger Band Strategy is One of the Most Profitable Strategy Used by the Trades who earn lots of Money!!!
You can't just use Bollinger Bands to Trade and Earn Money as you need to confirm the Break Out Signal that you get after a Bollinger Band Squeeze.
Here are some tips how to confirm that:
1. Always looks for Bollinger Band Squeezes as you will find Price Break Outs most of the times 2. Use RSI to confirm the Price Break Out 3. Make sure RSI is not Overbought/Oversold to have a Major Price Break Out 4. Look for Bollinger Band Width to see whether its Rising as well 5. When there's a Major Price Break out it will go on for 1 -3hrs so you can take multiple entry points to Maximize your profits 6. Always check the Support/Resistance levels as there's possibility of the Price reversing the other way 7. I would also recommend to check the investing.com and look for Strong Buy/Sell Signal before you enter your Trade 8. There will be fake break outs where the price go the otherway 9. You can have stop losses and enter the Trades on the otherway if there's a fake breakout
Few other Tips to Enhance the above:
1. Use default MACD to reconfirm the Trend Direction (Thanks for the Idea from HamzaLeith) 2. Check the Direction of the Upper/Lower Bands.
For Bullish reversal's and continuations (opposite is true for bearish reversals or continuations)
1.) Price approaches the Buy Zone and the upper and lower bands remain flat. Reversal - Likely a sharp reversal to the lower band. Because both bands are flat this will likely be short lived.
2.) Price approaches the Buy Zone and the upper band goes up and the lower band is flat or moving up slightly. Continuation - Price will likely continue up slowly for a time.
3.) Price approaches the Buy Zone and the upper band goes up and the lower band goes down. Continuation - Price will likely move up fast and furious. This is the best continuation pattern for the bands. This is a rapid expansion of volatility. You will experience "fake out's" sometimes but most of the time this set-up will produce some good profits when executed properly.
4.) Price approaches the Buy Zone and the upper and lower bands both go down. - Reversal - This is likely to result in a reversal
I think you are missing out some facts. On this chart you present only perfect entries and exits, but you do not present the whispsaws. At 15:15 you say that the bear move is over, as RSI is oversold and price has gone past the daily support (I don't know how this break of support qualifies as a bullish signal), but you don't say anything about what happens at 14:15. The signal is basically the same, only difference is price. The BBW is almost at the same level, the RSI is oversold (below 30) and there is a hammer at the daily support. Why would you not take this as a long signal, but only the 15:15? Probably because this is trading in the middle of the chart, not at the right edge. I'm not saying this strategy doesn't work, but when you make a review of a strategy you should take into consideration both the whipsaws and the good signals!
surangadesilva
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Good Point. Thanks for pointing out this as this will help to improve my strategy to be more accurate.
I think you can overcome this if you add a Bollinger Band with Stardard Deviation 1 so that the sell zone is between the below 2 Bollinger Bands and the buy zone is between the upper 2 Bollinger Bands. Middle area which is between SD -1 and +1 is "No Mans Land" and this is where you shouldn't trade or have stop loss setup. See the screenshot here:
No strategy will give only perfect signal, there will always be whipsaws. If such a strategy would exist, you would own the world :))
surangadesilva
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Yes there will be whipsaws and you wont be 100% successful but there are ways to get arounds for few of them to make you 70-80% successful. See here:
Let me know what you think ? Thanks
vlad.adrian
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Well, yes this is something else. On this chart, you dont enter and exit exactly at the tops and bottoms, unlike the main chart. Now this looks like a real strategy!
surangadesilva
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Thanks for you contribution to this strategy to improve it further. Thats why I like about Tradingview where you can share your ideas and tweak your own strategies which will help other people as well :-)
chungy11
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Hi there, how did you get those blue buy and sell zones showing on there?
chungy11
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Also, what are your bollinger band settings set to?
Also see my other reply with the settings that you should have for your Bollinger bands
Hope this helps. Please share the idea if this works for you. Thanks
surangadesilva
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Just Setup 2 Bollinger Bands:
1. Bollinger Band (BB) with Period of 20 and Standard Deviation 1 (Lets Say this is your BB #1). Then select your preferred color (orange in my example)
2. Bollinger Band (BB) with Period of 20 and Standard Deviation 2 (Lets Say this is your BB #2). Then select your preferred color (blue in my example)
Sell Zone: Between the Lower BB#1 and BB#2
Buy Zone: Between the Upper BB#1 and BB#2
Neutral Zone: Between the Upper and Lower BB#1 (Don't Trade Here / Take Profits Here)