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Hi Pal,
thanks for the feedback; see
below
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
palsanand
To: <A title=amibroker@xxxxxxxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Friday, September 19, 2003 6:35
PM
Subject: [amibroker] Re: using %b and
Bollinger's Method II
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.
does that mean you don't use
Volume?
One problem is what would you use as O/B, O/S levels?.
Good question...have you, by
chance, tried using %b on your indicators to determine O/B and O/S levels?
(Chapter 21: 'Normalizing Indicators' in Bollinger on Bollinger
Bands)
The adaptive lookback method is so arbitrary to be useful.
I do use the BandWidth to determine volatility for interpreting the
signal.
<BLOCKQUOTE
>
Do you lookback a certain
number of bars to determine BandWidth extremes or is it on a stock-by-stock
basis?
In my view, any indicator which acts just on the "close" price is
spurious except the Z-scores.
Do you use the same period for your
Z-scores as for the BandWidth period and what 'price' do you use?
(with %b, i tried both Close and
Average Price but didn't see much difference in results)
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 don't follow...Contrarian theory
for me means do the opposite of the majority...<FONT face=Arial
size=2>
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.
At least for his Method I
(volatility breakout system), he warns of frequent headfakes, where a breakout
occurs initially in the direction opposite of that which it eventually
takes...is that what you are referring to?
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.
it would be great to see a chart
illustrating what you mean in the last paragraph...
-john
--- 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:> > <A
href="">http://www.bollingeronbollingerbands.com/methods/main.php>
<A
href="">http://www.bollingeronbollingerbands.com/methods/main.php?method=2>
<A
href="">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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