welcome to this video on swing trading stock market another great setup with
Bollinger Bands this is part 2 of a little mini series you want to see part
1 just type in swing trading stock market / great setup with Bollinger
Bands maybe add top trading in there and you'll find it in youtube but you can
watch this one first
they're not in any particular order they're just two different setups using
bollinger bands for swing trading
actually you can use it for day trading as well and other markets as well but
particularly works well with the stock market for swing trading that's mostly
how i use it
ok so let's jump right into it as you'll see here first of all let's talk about
what the settings are so we're using bollinger bands with the setting of two
and 14 so 14 . and to standard deviation
that's what i personally use you can try with other settings as well and this is
a really good setup now the last one that we looked at just as a reminder
the previous one was where you get a real body that occurs outside of the
Bollinger Band either the upper bollinger band or the lower Bollinger
Band and depending on the type of setup you have it's a reversion to the mean
set up back to the 15 EMA generally in this kind of situation will just be a
little scalp trade and I like to do with options on daily charts that's how i
personally like to do it but you can use other things as well as i said before
ok now this setup that when teaching today is quite different
so here it is so the market goes up and price touches the upper Bollinger Band
now here's the key after it does that then you get a higher high that does not
touch the upper Bollinger Band and then comes back down
so both of these are different signals this one comes down this by the way is
the 15 exponential moving average this black line and then this moving average
here this green and red one that is the 50 period simple moving average
so it is showing a shift of the momentum if you will a little weakness there and
bollinger bands can be used couple of different ways number one is to measure
volatility but they can also be used to measure the strength and even trend so
they have multiple uses if you know how to read them now the key on this one is
that we are also using other things along with that so here's my cycle
indicator and by the way this half of the cycle indicator actually use this as
the primary kind of signals but then there's another
aspect of it another line we put in there to actually give us kind of a
leading indication beyond the actual cycle indicator and feel like that feel
free to email me a very apt are treating com
well actually four main youtube subscribers
I actually offer this for free along with the free tutorial on how to treat
it so feel free to send me an email
make sure you subscribe because it is for youtube subscribers and I just tell
this but if you guys get it for free anyway so I like to use it in
conjunction with the cycle indicator but even if you don't use it with that the
primary thing here is price action in relation to the bollinger bands and then
the third thing we want to look at is where are we in the trend
so here you see where a wave 7 but obviously there are not Elliot waves at
elliott wave is going to go up to five so we have seven now the significance of
that is that it means we are already in an extended trend the average trend the
way I read waves is five waves
so you can get a three-way of that be obviously shorter than the average five
would be average
once you get into seven that's when I start to look to fade the trend
potentially feed the trend and so this one we would expect a deeper retrace if
not a trend reversal we don't get a trend reversal here but it is expanded
extended trends so then after that as you can see what happens is the market
basically just goes sideways for a few months right
februari March April and early May so that essentially ends of that trend
so here's another example of the stock market swing trading this and with the
bollinger bands
so again I like to put this in the context of the trend very important to
understand that really the bottom line of what this signal is telling you is
that there is a high probability final cycle hi
that's the key that's the real point here
then you need to look at where you are in the trend as far as price structure
goes as to how far you expect the market to retrace from that
so here we have
the impulse move up okay we've got a we've won
- okay there's three now before i go to 3 we get an impulse move up from this
cycle low to that cycle high now
it touches the upper bollinger band here then market makes a higher high price
action makes a higher high that does not touch the upper Bollinger Band fact it's
quite a ways away from it
so then we would expect ok that is going to be the final cycle high before we put
in a cycle low that is the real signal that this is giving you then for any
other signals you need to look at other components such as you're moving
averages your momentum indicator of the next to your time frame things like that
to find out what your expectancy of profit will be but the very least I like
to see it come back to the 15
EMA so it comes back down here now if you were to trade options on this you
could buy a put you want to buy something that moves you know very very
correlated with the movement of the market so moving the pastor making money
real fast and because it's just a little scalp trade these are just sculpt rates
right now and that's true until we go up here and there we get for now again the
average wave is five and a trend market comes back up hits the upper Bollinger
Band rides it up right up
now look it hits the bollinger band here then we make another make higher high
much higher high after touching the bollinger band but where is the
Bollinger Band way the heck up here it's even up the chart
so then we would say okay now that is a high probability final cycle high before
we put in another cycle low at the difference with this one is wearing a
weave five
about which is an average trend
so yeah I'd expected to come down to the 15 EMA and maybe even go lower because
ok if it comes down let's say bought a couple of contracts or if you doing
shares or if you're doing it with you can do this with 4x as well but so lot
of contracts whatever market your trading but now the word an extended
trend that's actually an average trend I've extended trend and expected to come
down even further and that's what it is and that's on the heart rate of the
chart as of today this is a current chart and so you got a look at the
context again what Ellen fairly calls the landscape of the chart to determine
what type of reward you would expect out of that sometimes people ask me well
what type of rewards do you expect from your traits it depends on the trade
it depends on the trade so there you go
those are the pointers and works very well for swing trading the stock market
but also for X futures yes you can use it with day treating as well if you'd
like to but I find that it works great and I like to do it especially with
options for swing trading personally that's my preference
so if you like this video you're watching it on YouTube then go ahead and
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me by doing that and also I've got one of my favorite trade strategies is
called the rubber band trade that i will give you absolutely free
it's got a very high win loss ratio it's a simple strategy
I can teach it to you in about twenty six short minutes you can get the video
explaining that treat strategy by simply clicking on the image in the top left
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in the top right hand corner of this video and if you're not watching this
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once you do that i'll personally emailed the video to you along with the rubber
band trade setup and rules