Bollinger Band Screen

[alexchartfilter]

Bollinger Band Screen

Here is a popular Bollinger Band screen, you can also replace the Bollinger Band conditions with Keltner Channel.

Technical conditions:
1. (Bollinger or Keltner) Price crosses center line between 5-10 days ago
2. (Bollinger or Keltner) Price penetrates outer band between 0-1 days ago.

Fundamental conditions:
1. Average 30 day volume greater than 100 (** this means 100 thousand)
2. Volume ratio 20 day greater than or equal to 2

(see attached screen shots)

[Survivor]

Thank you Alex for all of your time. I will try it to see how it works.
Survivor

[alexchartfilter]

Originally Posted by Survivor

Thank you Alex for all of your time. I will try it to see how it works.
Survivor

Anytime

Let me know if you need any help.

Alex

[cajundjb]

Alex, I appreciate all the work you've put into these methods. Have you back tested this filter? In what ways does it work best, i.e; short/long term, day trade, certain stock price range, etc?

[alexchartfilter]

Originally Posted by cajundjb

Alex, I appreciate all the work you've put into these methods. Have you back tested this filter? In what ways does it work best, i.e; short/long term, day trade, certain stock price range, etc?

This is a better screening strategy rather than a trading strategy. I find this to be a good screen for breakouts. Not all results are good but there is some gold to be found in those lists.

When evaluating results, always check the company as well as the overall industry trend to support you convictions. Plus there should always be a volume spike to support the breakout (dow theory)

If you are looking to trade a bollinger band strategy, our last newsletter covers the complementary indicators to be used with the bollinger bands. [click here for newsletter]

Also I have some reservations towards backtesting. Your indicators and parameters to those indicators should change based on the type of stock/industry you are trading. IE trending, sideways, etc.. Backtesting may give you a false confidence, just because it works today on those stocks, does not mean it will work forever. Understanding the strengths and weaknesses of an indicator will keep you with the trend better and fitting your indicators to the stock you plan to trade is done best with a human.

This is a good article in regards to fitting parameters. [click here for newsletter on parameters]

Let me know if this helps

Alex