Developing a system #13 (Trading outside Bollinger Bands)
Submitted by ICUR2Ys on February 3, 2009 - 05:40.
Hi I have only been back testing systems for the last 2 months and have not even started paper trading yet. But This is what I have come up with so far. I have only begun back testing this with these exact rules two days ago. from Jan. 2, 2000 to May 24, 2000 this made over $13,000 using 1 standard contract on GBP/USD and Subtracting $40 pip spread per trade. This consisted of 6 trades, the last trade last almost 1 month and was more than $10,000 profit (wish it were real).
Prices are trending when outside the Bollinger Band, trend changes cross the BB and consolidation takes place within the BB (MOSTLY).
Use the Hat test: Only buy if you really like the trade.
Do not take trades within BB during consolidation
Entry: Enter when price crosses the 5 VMA AND (CCI > 50 or CCI< -50) AND MACD agrees and FullS agrees
Exit: Exit when price crosses 5 VMA
Exit: Exit when MACD crosses opposite to direction of trade
Stop Loss: Set stop at days low and move it at end of day to day's low (day's high if short) OR place stop just across the 5VMA (used to stay in trend)
Re-Entry: if stopped out and price has not crossed VMA then re-enter when price
closes above (bullish) or below (bearish) previous days close.
BB(34,1), 5 VMA, 100 MA, MACD(5,13,9),CCI(13), FullS(10,3,9), Time Frame: Daily.
I hope that I managed to make this clear.