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Bollinger Bands measures Std deviation where Odds measures volatility. The
different is that Volatility is an annualized rate. Which means the Std
deviation must be multiple by an annnualization factor. Which is simple the
square root of the number of trading days in a year.
Also Bollinger bands methodology is when the price of the stock is either
above or below the outer bands the stock will tend to trade in that trend,
until broken. Odds methodology is the opposite. It takes the current price
and projects out the volatility, suggesting the max and min price of the
stk given a 95% confidence (i.e. 2 times the volatility).
In fact a further study of Bollinger Bands further demonstrates that ODD
does not work due to the fact that the means is not static. A better low
cost method is to use the ODDS indicator in metastk. It projects out the
user required volatility for taking positions.
regards
johnnie
-----Original Message-----
From: Tony Harring <greatsigns@xxxxxxxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, July 27, 1998 10:56 AM
Subject: Re: More on Fishback
>I think I have a better system altho I don't trade options. Use the normal
>bell curve eg Bollinger Bands which if memory serves me correctly -2 gives
>94% probability the range will hold within that band. Simply sell at the
>extreme and when the bands close tight, buy. Obviously you could also have
a
>buy protection above the 2 band in case things get wild and premium would
be
>little.
> tony
>
>-----Original Message-----
>From: Bill Sklodowski <bsklodowski@xxxxxxxxxxx>
>To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
>Date: Monday, July 27, 1998 12:45 AM
>Subject: More on Fishback
>
>
>>I also just recieved the booklets and video from Fishback on his options
>>"system." I've just finished reading the whole thing (less than a
>>night's work), and I've also watched the video.
>>
>>The main book "Options for Beginners" is just that.... nothing I'm sure
>>average option player don't already know. The video and booklet
>>explaining the ODDS system are quite a bit more complicated, but when
>>all is said and done, I found myself wondering "what's the bottom line?"
>>How do I trade this system? (If is even a "system" at all.) That answer
>>seems to be found in the little 8-page supplement "How to win 87.5%,
>>etc." Here's how I boil it down... let me know if you think I got it
>>right....
>>
>>In trading an index (Fishback uses the S&P 100), we're guessing the
>>index will trade within within 5% of where it started the month. Using
>>an option strategy called a credit spread, we can sell both puts and
>>calls five percent out of the money, and then insure our bets by buying
>>the same number of puts and calls at the next strike price out from the
>>ones we sold. For example, if the index is trading at the start of the
>>month at 500 (nice, round number), we can sell the 525 call and sell the
>>475 put for profit, and then insure it by buying the 530 call and 470
>>put. We pocket the difference between the puts and calls sold versus the
>>ones bought for insurance. And unless the market makes a fairly big move
>>in either direction, the puts and calls we sold expire worthless (all
>>profits to us), and so do the "insurance" bets (but at a lesser loss
>>than the income from the sales).
>>
>>How does that sound? Is anybody doing this? And if so, is that five
>>percent "estimate" on a monthly move fairly safe? Fishback says you can
>>adjust the system to any level of safety you want, simply by selling
>>farther out of the money puts and calls. (The further out of the money,
>>the less the chance of the market moving to that point, the greater the
>>margin of safety - and less profit as well.)
>>
>>Again, I'd love to hear from anyone making this work. Thanks in advance
>>for your replys.
>>
>>Bill Sklodowski
>>
>>______________________________________________________
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>>
>
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