Bollinger Bands merupakan salah satu parameter populer dalam Technical Analysis. Berikut ini KEY POINTS TO REMEMBER dari buku Bollinger on Bollinger Bands.
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BOLLINGER ON BOLLINGER BANDS
KEY POINTS TO REMEMBER
Chapter In The Beginning
• Basic data include the open, high, low , close, and volume.
• Don’t neglect the open.
• Four types of charts are line, bars, point and figure, and candlestick.
• Bollinger Bars are the marriage of bars and candlesticks.
• Log scaling is important.
• Normalize volume.
TIME FRAMES
• Three time frames are short, intermediate, and long.
• Fit the time frames to your own horizons.
• Organize tasks by time frame.
• Use a descriptive average as a base.
Continuous advice
• Continuous advice doesn’t work.
• Bollinger Bands can help find setups with good risk-reward characteristics.
• Indicators can help.
• Technical and fundamental analysis can be combined to your advantage.
BE ON YOUR ON MASTER
• Think for yourself.
• Know your risk tolerance.
• Know your goals.
• Follow your own path.
• Be disciplined.
HISTORY
• Bands have a long history.
• Many analysts have made important contributions.
• Percentage bands were most common.
• Bollinger Bands were born in 1983.
• The key to Bollinger Bands is volatility.
• Adaptivity is very important.
CONSTRUCTION
• Use a simple moving average for the base.
• Use standard deviation to set the width.
• The defaults are 20 days and 2 standard deviations.
• Vary the bandwidth as a function of average length.
• Keep it simple.
BOLLINGER BAND INDICATORS
• %b depicts (describes) where the last price is in relation to the bands.
• %b is useful in creating trading systems and signals.
• BandWidth depicts the width of the bands in a relative manner.
• BandWidth is used to identify The Squeeze.
• BandWidth is useful for identifying the beginnings and ends of trends.
STATISTICS
• Statistical rules hold generally, but not absolutely, for Bollinger Bands.
• Regression to the mean is not as strong as it should be.
• Use indicators to confirm band tags.
• Volatility is cyclical even when price is not.
• High volatility begets (generates) low, and low volatility begets high.
PATTERNS RECOGNITION
• Ms and Ws are the most common patterns.
• Patterns are often fractal (form/ repeated at every scale).
• Bollinger Bands can be used to clarify patterns.
• Lows (highs) outside the bands followed by lows (highs) inside the bands are typically reversal patterns even if a new absolute low or high is made.
• Volume and momentum indicators are very useful for diagnosing tops and bottoms.
FIVE-POINT PATTERNS
• Price filters can be used to filter out noise and clarify patterns.
• Percentage filters are best for stocks.
• Bollinger Boxes offer a superior filtering approach.
• All price patterns can be categorized as a series of Ms and Ws.
W-Type Bottoms
• W bottoms and their variations are the most common.
• Spike (sharp) bottoms do happen, but they are rare.
• Ws may be transitions to bases rather than reversals.
• Bollinger Bands can help clarify Ws.
• Buy strength after the completion of a W.
• Set a trailing stop to control risk.
• Potential W bottoms are listed each trading day on www.BollingeronBollingerBands.com.
M-Type Tops
• Tops are more complex than bottoms; hence they are harder to diagnose.
• The best known top is the head-and-shoulders.
• Three pushes to a high is a very common formation.
• The classic top shows steadily waning (declining/gradually decrease) momentum.
• Wait for a sign of weakness.
• Look for countertrend rallies to sell.
• Potential M tops are listed each trading day on www.BollingeronBollingerBands.com.
WALKING THE BANDS
• Walks up and down the bands are quite common.
• There is nothing about a tag of a band that is a buy or sell in and of itself.
• Indicators can help distinguish between a confirmed tag and an unconfirmed one.
• The average may provide support and entry points during a sustained trend.
THE SQUEEZE (HUG/EMBRACE/CONTRACT)
• Low volatility begets (generates) high volatility.
• High volatility begets low volatility.
• Beware the head fake (false/falsify).
• Use indicators to forecast direction.
• Squeeze lists are available on www.BollingeronBollinger-Bands.com.
METHOD I : VOLATILITY BREAKOUT
• Use the Squeeze as a setup.
• Then go with an expansion in volatility.
• Beware the head fake.
• Use volume indicators for direction clues.
• Adjust the parameters to suit yourself.
• Lists of Method I candidates are available on www.BollingeronBollingerBands.com.
BOLLINGER BANDS AND INDICATORS
• Use indicators to confirm band tags.
• Volume indicators are preferred.
• Avoid collinearity (lying on the same line/linear).
• Choose your indicators before the trade.
• Use prebuilt templates for analysis.
• If you must optimize, do so carefully.
VOLUME INDICATORS
Table 18.2 Categories of Volume Indicators
Category Examples
Periodic price change On Balance Volume, V olume-Price Trend
Periodic volume change Negative and Positive Volume Indices
Intraperiod structure Intraday Intensity, Accumulation Distribution
Volume weighting Money Flow Index, V olume-Weighted MACD
• Volume is an independent variable.
• Volume indicators may be categorized by calculation type.
• Focus on AD, II, MFI, and VWMACD.
• Look at both open and closed forms of AD and II.
METHOD II: TREND FOLLOWING
• Method II buys strength and sells weakness.
• Buy when %b is greater than 0.8 and MFI is greater than 80.
• Sell when %b is less than 0.2 and MFI is less than 20.
• Use a Parabolic stop.
• May anticipate Method I.
• Explore the variations.
• Use Rational Analysis.
• Lists of Method II candidates are available on www.BollingeronBollingerBands.com.
METHOD III : REVERSAL
• The buy setup: lower band tag and the oscillator positive.
• The sell setup: upper band tag and oscillator negative.
• Use MACD to calculate the breadth indicators.
• Lists of Method III candidates are available on www.BollingeronBollingerBands.com.
NORMALIZING INDICATORS
• Use Bollinger Bands to normalize indicator levels.
• Generally, longer average lengths are needed.
• Try re-plotting the indicator as %b.
DAY TRADING
• Choose your charts carefully.
• Tighten BB parameters for trading breakouts after Squeezes.
• Sell reversals outside the bands.
• Try volume indicators.
• Be careful about crossing session boundaries.
SUMMING
15 BASIC RULES
In closing, here are 15 basic rules to remember regarding Bollinger Bands:
1. Bollinger Bands provide a relative definition of high and low.
2. That relative definition can be used to compare price action and indicator action to arrive at rigorous (rigidly accurate/ allowing no deviation from a standard) buy and sell decisions.
3. Appropriate indicators can be derived from momentum, volume, sentiment, open interest, intermarket data, etc.
4. Volatility and trend already have been deployed in the construction of Bollinger Bands, so their use for confirmation of price action is not recommended.
5. The indicators used for confirmation should not be directly related to one another. Two indicators from the same category do not increase confirmation. Avoid collinearity.
6. Bollinger Bands can be used to clarify pure price patterns such as M-type tops and W-type bottoms, momentum shifts, etc.
7. Price can, and does, walk up the upper Bollinger Band and down the lower Bollinger Band.
8. Closes outside the Bollinger Bands can be continuation signals, not reversal signals—as is demonstrated by the use of Bollinger Bands in some very successful volatility-breakout systems.
9. The default parameter of 20 periods for calculating the moving average and standard deviation and the default parameter of 2 standard deviations for the Band Width are just that, defaults. The actual parameters needed for any given market or task may be different.
10. The average deployed should not be the best one for crossover signals. Rather, it should be descriptive of the intermediate-term trend.
11. If the average is lengthened, the number of standard deviations needs to be increased simultaneously–-from 2 at 20 periods to 2.1 at 50 periods. Likewise, if the average is shortened, the number of standard deviations should be reduced-–from 2 at 20 periods to 1.9 at 10 periods.
12. Bollinger Bands are based upon a simple moving average. This is because a simple moving average is used in the standard deviation calculation and we wish to be logically consistent.
13. Be careful about making statistical assumptions based on the use of the standard deviation calculation in the construction of the bands. The sample size in most deployments of Bollinger Bands is too small for statistical significance, and the distributions involved are rarely normal.
14. Indicators can be normalized with %b, eliminating fixed thresholds (entrance) in the process.
15. Finally, tags of the bands are just that–-tags, not signals. A tag of the upper Bollinger Band is not in and of itself a sell signal. A tag of the lower Bollinger Band is not in and of itself a buy signal.
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