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Hi,
I looked at %b and also have the code in AB but I didn't find it
more useful than RSI, Stochastics and Z-Scores. One problem is what
would you use as O/B, O/S levels?. The adaptive lookback method is
so arbitrary to be useful. I do use the BandWidth to determine
volatility for interpreting the signal.
In my view, any indicator which acts just on the "close" price is
spurious except the Z-scores. Z-scores are an exception because
they are grounded solidly on Statistics and is widely used in
several different fields and proven to be useful... I have stopped
applying the RSI and Stoch on the "close" price either.
I did not find %b and BB's Method II useful mainly because I have
problems with any theory that contradicts the "Contrarian" theory.
As they say, practice without theory is impossible, and theory
without practice is useless....
I agree with Bollinger in using the BandWidth to interpret the
Volatility Breakout and Counter-trend pullback signals. But
sometimes, the Counter-trend pullback becomes a Breakout and the
Breakout becomes a Counter-trend pullback. So, I use both stops and
Limits based on Volatility. Stops based on 3BSMA in the same old
counter-trend territory to cut your losses short or to protect
profits and stops based on Gann's Rule of Eights in the newly
trending opposite territory to let your profits run. Limits are
based on 6 bar Gann Swing points and will vary depending on
volatility breakout or counter-trend pullback.
Pal
--- In amibroker@xxxxxxxxxxxxxxx, "john gibb" <jgibb1@xxxx> wrote:
> Hi sloughbridge,
>
> I interpret Method II to be a trend continuation rather than trend
reversal (end-of-trend) system.
>
> I am using SAR for exits and the '%b<20 AND MFI<20' only for new
sell signals.
>
> But, since my results are not that great, I may take his
suggestion and use Method II merely as a setup for his Squeeze
(Method I) system. (I also have this thought that %b should be
qualified by the BandWidth; i.e., an %b of 80 when the bands are
narrow doesn't seem as good a signal as %b of 80 when they are wide)
>
> -john
>
> PS: for those who don't have his book, here are the three systems
he presents there:
>
> http://www.bollingeronbollingerbands.com/methods/main.php
> http://www.bollingeronbollingerbands.com/methods/main.php?method=2
> http://www.bollingeronbollingerbands.com/methods/main.php?method=3
> ----- Original Message -----
> From: sloughbridge
> To: amibroker@xxxxxxxxxxxxxxx
> Sent: Friday, September 19, 2003 1:28 AM
> Subject: [amibroker] Re: using %b and Bollinger's Method II
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "john gibb" <jgibb1@xxxx>
wrote:
> > Hi,
> >
> > I am using 'regular' %b with Money Flow Index in order to
> replicate, with EOD data, Bollinger's Method II (trend
following)
> system from his book Bollinger on Bollinger Bands. (Both %b and
MFI
> have to be above 80 for a buy and below 20 for a sell.)
>
> > Also, has anyone else used Bollinger's Method II? So far, my
> results are mediocre at best.
>
> Well, he also talks about other end-of-trend indicators, and
Method
> II followed lots of discussion of topping patterns. And he
talked a
> lot about Parametric SAR for an exit with Method II. I think
that a
> lot can be lost if no sign of end-of-trend is detected until %
b<20
> and MFI<20, but it would definitely give a trending stock plenty
of
> room to run :)
>
>
>
>
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