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Pawel Kosinski’s article, “Combining Bollinger Bands with Candlesticks”, explains how to construct a trading system based on the analysis tools named in the title. The strategy uses 20-period Bollingers Bands set at 2.2 standard deviations from the center average and 4 times a 14-period Average True Range for a maximum loss stop. The entry and exit formulas for that system are shown below:
Buy Order tab:
Formula: Code:stop:= Ref(C, -1) - (4 * ATR(14));
RR:= (BBandTop(C, 20, S, 2.2)-H)/ (H-RR);
el:= C > Ref(H, -1) AND Ref( EngulfingBull(), -1) AND
Ref( Alert( L < BBandBot(C, 20, S, 2.2), 2), -1) AND RR > 1.0;
xl:= H > BBandTop(C, 20, S, 2.2);
trade:= If( PREV<=0, If(el, stop, 0),
If( L<= PREV, -1, If( xl, -2, PREV)));
trade > 0 AND Ref(trade <= 0, -1)
Sell Order tab:
Formula: Code:stop:= Ref(C, -1) - (4 * ATR(14));
RR:= (BBandTop(C, 20, S, 2.2)-H)/ (H-RR);
el:= C > Ref(H, -1) AND Ref( EngulfingBull(), -1) AND
Ref( Alert( L < BBandBot(C, 20, S, 2.2), 2), -1) AND RR > 1.0;
xl:= H > BBandTop(C, 20, S, 2.2);
trade:= If( PREV<=0, If(el, stop, 0),
If( L<= PREV, -1, If( xl, -2, PREV)));
trade < 0
Order Type: Stop Limit
Stop or Limit Price: Code:stop:= Ref(C, -1) - (4 * ATR(14));
RR:= (BBandTop(C, 20, S, 2.2)-H)/ (H-RR);
el:= C > Ref(H, -1) AND Ref( EngulfingBull(), -1) AND
Ref( Alert( L < BBandBot(C, 20, S, 2.2), 2), -1) AND RR > 1.0;
xl:= H > BBandTop(C, 20, S, 2.2);
trade:= If( PREV<=0, If(el, stop, 0),
If( L<= PREV, -1, If( xl, -2, PREV)));
If( trade = -1, Ref(trade, -1), C)
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