Double Bollinger Bands Trading Strategy Explained. // indicator setup tutorial for traders stocks options forex binary chart youtube video pdf david moadel
a double Bollinger Band strategy we're gonna put not one but two Bollinger
Bands on the screen and let's see what we can do with that
all right here's an example and this is a close-up and all these charts today
are from stockcharts.com so I wanted to give them credit for that
alright so sometimes want to teach people about Bollinger Bands you know I
might tell them ok you can use the now this is the two standard deviation
Bollinger Band and this is all these charts today are on a daily candlestick
chart so each candlestick represents one day of price action and the blue lines
here those would be the two standard deviation Bollinger Bands alright and
that's the standard setting that you'll see so sometimes I might teach people
that you can use this you know the bottom band as a potential buy signal
and then you can sell when it reaches the upper band but you know sometimes
people complain that they're not making enough money from this method they want
to let it run more for example in this in this example as you can see if you
bought here at the lower band and then sold at the upper band you'd make a
profit but you could have made a much much greater profit you could have let
it run a lot more and so what you could do is put on the screen not just the two
standard deviation Bollinger Bands but also the three standard deviation
Bollinger Bands which are the red lines here and those are much wider and so in
order to let in order to let your winners really run you can you know buy
at the lower two standard deviation Bollinger Band like you normally might
do but then don't sell until it hits the three standard deviation upper band
there and as you can see it's really running here and you would make a much
bigger profit potentially than if you would just sold here after buying here
all right and this is what it looks like on stockcharts.com this is the standard
settings you go down to overlays after you plot your you know you put your
chart up and then you go to overlays and then you put your Bollinger Bands on for
the standard settings 20 + 2 that's 20 20 period and 2 standard deviations and
then you put another Bollinger Band on but this time you have to change it from
20 and 2 to 20 and three standard deviations all right so it's wider
alright so let's look at some examples this is Expedia and for example you know
if you had bought here when it touched the lower to standard deviation band and
then you know you would have ended up selling here if you just stuck if you
just stuck with the the two standard deviation bands but if instead you
waited until it touched the three standard deviation upper band which is
way up here you would have made a much bigger profit so it's all about letting
your winners run if you use this method alright here's another example this is
Cigna and you know if you had bought here when it reached the lower two
standard deviation Bollinger Band and then it went down a little bit and if
you had sold when it reached the upper two standard deviation Bollinger Band
you would have made a profit or you could have let it run and it would have
run and run and run all the way up to here if you had decided not to sell
until it had reached the upper three standard deviation Bollinger Band the
wider one here's another example with Pepsi and
this is a really great example because if you had bought at the when it touched
the lower to standard deviation Bollinger Band and if you had done the
typical thing of selling when it reached the upper to standard deviation
Bollinger Band you would have made a profit from here to here it's not bad
but you could have also let it run you could have decided beforehand I'm not
going to sell until it reaches the three standard deviation Bollinger Band and
then you would have made you would have bought here and then it would have run
all the way up to here for a really nice profit and one more example this is eBay
and again you could have bought at the lower two standard deviation band got
went down a little bit hopefully you wouldn't get shaken out all right and
then if you decided to sell at the upper two standard deviation band you would
have made a profit from here to here you would have sold here not bad or you
could have let it run you could have decided I'm not going to sell until it
reaches the three standard deviation Bollinger Band and then it would have
run all the way up here it almost touched it here even if you had sold
here that's still better than here but it didn't quite touch it here and notice
that it went down but if you had been patient there's a double bottom pattern
just wait it out write it out and finally you would have sold way up here
and you would you would have made a profit buying here selling way up here
hopefully didn't get shaken out with this double bottom pattern here and you
would have done really nicely alright so check that out put on not just the
standard settings that two standard deviation Bollinger Bands but throw up
the the three standard deviation Bollinger Bands if you want to use this
double double Bollinger Bands strategy alright so hopefully this was helpful to
you if you know need more help with technical
indicators trading investing options stocks whatever it is you can contact me
anytime by email my name is David Modell and my email address is David Modell at
gmail.com and if you like this video if you found it helpful please give it a
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videos thank you so much I appreciate it and I'll talk to you again soon