the best bollinger band breakout strategy from data trader today i'm gonna test it 1 000 times
to see if it is actually the best and just a disclaimer i am not a financial advisor and take
everything that you see and made in this video as entertainment and of course all the indicators
that you see in this video work on all time frames that work on all markets they then repaint data
and withdrawal and they're a hundred percent for free on trading view go to your indicators
tab on top and just type in bollinger band and it will be the default script of the bollinger band
and also just search for the bollinger band width just slightly below it and then type in the money
flow index this is also a built-in script these are the three indicators that we're going to use
today and the settings for the bollinger band are pretty much default i just changed the style to
look a little bit more pretty but as you can see the input is basically default and then the bbw
this is also on default i also just changed the style here and then the same with the money flow
index the only thing that i changed here was the overbought and i just left it on 50 and
i disabled the oversold but the input is also default so let us focus on the bollinger band
first there is a orange line which is a 20 moving average and if the price crosses over this 20
moving average we are in for a buy and once it goes below we are in for a cell then there are
these outer bands of the bollinger if it widens this means volatility is increasing and once it
narrows down that means volatility is decreasing for the most part people also use these kinds of
bands for oversold and overbought periods and as you can see with that buy once it goes over and
comes back into the bowling girand that is telling us that we are in for a cell and then vice versa
if it breaks onto the downside and it comes back up that is triggering us for a buy but generally
this is a bad idea because it gives a lot of wall signals and you're gonna get stopped out pretty
often as you can see with these two setups both times it was a buy and it was oversold condition
it broke outside the bollinger bands and it came back down but as you can see the trade on the left
you would have been stopped out if you did place your trade because the price did continue to the
upside but the other time it did work out for you so you can see sometimes this will work
and sometimes not which is not really what you want to do and as you can see over here once the
bollinger band is widening this is telling us that volatility is increasing and then same vice versa
once it starts getting more narrow this is telling us that the volatility is decreasing and over here
you can see it's pretty much in a funnel telling us listen here you are in sideways movement and of
course in this stage you do not trade at all but as you can see with this candle that i'm
pointing out on this is where the breakout happens the bollinger bands are widening and the price
has broke outside the bollinger band same over here as you can see the bollinger band has pinched
down and that is telling a sideways movement and as you can see with the candles that has pretty
low volatility and then just soon after that price breaks out the candles are enlarging and that is
telling us hey listen the volatility is increasing and as you can see on the screen that looks pretty
good now with data trader setup he didn't use the volume bollinger band traditionally he used
the breakout system so as you can see over here the price is pretty much in sideways movement the
moving average has to be relatively straight as you can see over here and the bands are squeezing
down and now i'm going to add the bbw and as you can see once it goes down this is telling
us volatility is decreasing and when it's kind of flat like this it is telling us hey there is
no volatility in the market do not trade but soon after but soon afterwards you can see that it's
starting to climb it is increasing telling us okay now volatility is increasing and it's
pretty much in sync with bollinger band and you can see with that channel that i'm pointing out
that is our trigger candle it broke above the 200 dma and just touched over that bollinger band and
of course the bollinger bands width is increasing as you can see over here and just another thing
to note down is if we are in that buy setup and the price does come back down below and
crosses below that 20 ema that is signaling us for an exit which i'm pretty happy that he
included into the system as well so if i'm going to place my position risk 1 to 1.5 you can see
the position would have been closed out but for in case it doesn't the exit is there to help you out
and now to include the last indicator which is the mfi same trade we can see we are in sideways
movement the bollinger band is narrow and that moving average is pretty straight and with the mfi
you can see there is a crossover above that 50 line and it's pretty much in sync with the bbw
and the bollinger band itself so with the mfi if we are in for a buy position it needs to be
above that 50 and below for a cell and over here we can see this is our trigger candle all the
conditions are met and we'll place our trade at the start of a new candle and if you wonder why
i'll explain that later on in the video and i'm gonna place my stop-loss at the previous high
or low and risky one to one point five let's spread and this is how it's pretty much gonna
work a lot of things to include but it can be done and then for the last example as we can
see over here the bollinger bands are narrowed that moving average is pretty much great the bbw
is pretty much flat as well as we can see over here and then eventually it will open up on
this candle over here not quite yet ready the bollinger bands haven't flared out but in the
second candle it did as you can see it is a little bit different hasn't risen quite enough and that
mfi wasn't triggered but on that candle over here all the conditions were met as we can see the mfi
it is below that 50 range the bpw has risen so we can take our trade at the start of a new candle
i'm gonna place my stop-loss at the previous high then risking 1 to 1.5 to split as you can see here
it wouldn't have made it but soon afterwards you did have that exit strategy included which could
have saved you a bunch of pips and that is exactly the reason why we include exit indicators and exit
strategies so now let us get into the testing now i just want to give a special thank you to my team
getting these results will be impossible without you guys so thank you very much so today i'm going
to use something a little bit different i'm gonna use the good calculators it is a website and it
has a bunch of different calculators that you can use i will put a link down below for this
website it is completely for free you don't have to subscribe or anything and on the eur usd pair
we can see we had 46 wins and 154 losses that gave us an average win rate of 23.53 percent
and on the euro jab we had 54 wins 146 losses and an average win rate of 27.23 and on gold 40
wins 160 losses that gave us 20 win rate and on nasdaq 44 wins 156 losses an average win rate of
22.14 and on bitcoin it was 64 wins 136 losses and that gave us an average win rate of 32.18
so now let us put it all together and go into the information center now putting all this together
we had an average win rate on a 1 to 1.5 of 25 an average win rate on a one to one point two
a thirty two percent and the average win rate on one to one of 44 so we had a significant jump
every time we decreased that rnr and surprisingly bitcoin did much better in this test than any
other pair so the total test to be done was 1 000 200 trades on each of these pairs on a four
hour time frame the leverage was once 100 spread was three the raise the reward was 1 to 1.5 the
starting date was from 2015 the wins in a row were two and the losses in a row were seven so nothing
against data trader but this is hardly the best bollinger band strategy out there so i'm gonna let
the results just stay here for a little while then we're gonna continue into the scoreboard
and as we can see on the scoreboard the bollinger bands agrees with with the mfr
indicator and the bbw 1000 tests were done by data trader just came in at 25 literally
one of our lowest ranked indicators on the four hour chart risking one to one point five
now this was not really meant to go over a one to one ratio with this strategy as most of the times
you just come in too late for a trend but as we saw we had a significant jump from the one to one
point five to one to one so not all strategies are equal that is why i include the one to one
point five one to one point two and a one two one so we can get a little bit more information
you