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Very true, the contraction is only reasonable use of BBands. Buy or sell the
break, don't try to guess. The length of time in the contracted state
approximates the length of time in the movement.
Trading is based on contraction and expansion of price and volume.
Richard Estes
-----Original Message-----
From: Scott Roycraft <roycraft@xxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Saturday, June 06, 1998 1:58 PM
Subject: Re: MA Envelope
>
>-----Original Message-----
>From: Tony Harring <greatsigns@xxxxxxxxxxxxxxxx>
>To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
>Date: Saturday, June 06, 1998 1:28 PM
>Subject: RE: MA Envelope
>
>
>|you should look at Bollinger bands. I use them and change the parameters
to
>|18 and 1.8 instead of default 20 periods and 2 standard dev. When it gets
>|very narrow it is due for a breakout in either direction. tony
>|
>
>
>How can you tell which direction? I have noticed that some of the time when
>it moves
>outside the band it will pull back in forming a turning point. Other times
>it "slides" down
>or up the band continuing to make new lows or highs. About the only thing
it
>tells me is
>like you said -- when it gets narrow some thing is about to happen. But I
am
>constantly
>getting caught on the wrong side! There has to be something that can be
>combined
>with these bands to help in the direction of the break.
>
>Scott
>
>
|