Tag: Bollinger Bands

I made a Trading Indicator that DISAPPEARS in the Choppy Market – Trading Rush Choppy Market Indicator

Post author By Trading Rush
Post date July 15, 2021
1 Comment on I made a Trading Indicator that DISAPPEARS in the Choppy Market – Trading Rush Choppy Market Indicator

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Tag: Bollinger Bands

(FREE) Trading Rush Choppy Market : https://www.patreon.com/posts/trading-rush-52806962

I made a Trading Indicator that disappears in the choppy markets, so you don’t have to lose money in them. We are also going to take more than 100 trades with this disappearing indicator to see if it actually increases the win rate of a trading strategy. First, we created the Beep Boop indicator in the AI trades video, and it was surprisingly good! Then we created the Trading Rush Moving Average that disappears in the range market, and now, introducing the Trading Rush Choppy Market, which disappears in the choppy market, and even shows the strength of the good market.

If you have watched chapter 14 in the Trading Rush Price Action Course, you probably remember the simple but effective technique that you can use to filter the choppy markets. The Trading Rush Choppy Market indicator improves that technique even further.

The TR Choppy Market has three main components. When the price movement is good, the Trading Rush Choppy Market will indicate it with light green bars. When the price movement is extremely good, the Trading Rush Choppy Market will indicate it with dark green bars. However, if the price movement is choppy, the green bars will simply disappear.

But then there is this line that looks like a moving average because it is and it is showing the average strength of the good price movement. For example, when the price movement is good, and multiple green bars are formed in the Trading Rush Choppy Market Indicator, the average line will move in the upward direction. But when the price is choppy and not worth trading, the green bars will not only disappear, but the average line will start falling towards the zero line.

The TR Choppy Market Indicator ranges from zero to a hundred, and the higher the average line is, the better the price movement is. As you can see here, when the price movement is good and not choppy, the average line is staying above 20. And when the price gets choppy, the average line falls towards the zero line, and stays below 20 for the most part.

This is the first version of the Trading Rush Choppy Market Indicator, and while testing I have found that 20 is the starting level that differentiates the good vs bad market, and the higher you go, the more choppy market you are going to filter. By default, the Trading Rush Choppy Market will come with a horizontal line that you can adjust. If you noticed that on a particular chart 50 is the level that differentiates the good vs bad market, you can simply move the horizontal line to 50, and with that, you will also adjust the size of the green bars.

But now, let’s put the Trading Rush Choppy Market Indicator to the real test, to see if it actually filters the choppy markets.

But, we need a trading strategy that gives many entry signals in a short amount of time, and a market that is choppy and trending, so we can see if the win rate increases with the Trading Rush Choppy Market indicator.

For the indicator, we simply come to the Trading Rush website, look at the TR Scores of many different strategies that we tested 100 Times, and then select the indicator that gave a bad win rate.

Let’s use the CCI indicator that only got a TR Score of 3.5 in the win rate category, and I found AUD JPY, which is trending and is choppy on the 5 mins timeframe.

To see if the win rate goes up with the Trading Rush Choppy Market, I took more than 400 trades in total with different settings.

When I took 100 trades with the CCI indicator without the TR Choppy Market filter, it got a 29 percent win rate with a 1.5 to 1 reward risk ratio. The win rate is so low because the CCI has a bad win rate in the first place, and on top of that, we are testing it in the choppy market. But when I tested it again with the Trading Rush Choppy Market filter, with the 20 level to differentiate clean vs choppy market, it increased the win rate by 3 percent on the same market structure. And with the 30 level, the win rate was 4 percent higher. And when the 40 level was used to differentiate good vs bad market, the win rate was 12 percent higher, but I ran out of data and was only able to take around 80 trades. Adding around 20 more trades shouldn’t make a big difference to the win rate, because others had pretty similar win rates at the 78th mark as they did at 100.

In other words, the win rate significantly improved with Trading Rush Choppy Market Indicator, and it got better with higher filtering levels.

If we compare charts side by side, you can see that on this chart, the price got choppy in an uptrend. The CCI indicator on its own gave 8 false entry signals. But with the Trading Rush Choppy Market filter, 6 out of 8 signals disappeared. Here, CCI on its own gave 8 signals in the choppy market, but with the TR Choppy Market filter, only 2 remained. On this chart, the CCI indicator gave 10 bad signals, but with the Trading Rush Choppy Market Indicator, 60 percent of the bad trades were filtered.

Does this mean the third Trading Rush indicator we created is successfully filtering the choppy and bad markets? According to the data, it definitely is, and you can try it yourself because it is absolutely FREE just like all the indicators we have created so far! I will share the source code in a public Patreon Post with the installation steps! LINK is in the description! Also, support Trading Rush on Patreon and get to see In-Depth Trade Analysis and Trade Opportunity Signals. Thanks for watching!

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I took 100 TRADES with FAST FISHER TRANSFORM Trading Strategy. Here’s What Happened

Post author By Trading Rush
Post date May 14, 2021
1 Comment on I took 100 TRADES with FAST FISHER TRANSFORM Trading Strategy. Here’s What Happened

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Is the Fisher Transform really that good? What’s the win rate of the Fisher Transform Strategy? What are the advantages and Disadvantages of Trading with the Fisher Transform Indicator? In this video, I took 100 Trades with the Fisher Transform Strategy to find that out! Fisher Transform is an interesting indicator because while taking 100 trades with it, it was indicating the end of a pullback with great accuracy. In fact, till the first 30 or so trades, the profit line in the Trading Rush App went in an upward direction in almost a straight line.

However, the good accuracy was not the only thing that led to a good profit graph at the start. You see, the Fisher Transform Indicator compared to other accurate indicators like MACD reacts to the price movement faster. When the pullbacks were smaller in a good trend, the Fisher Transform was quick at reacting to the price movement and gave entry signals pretty much near the end of the pullbacks. But as we saw in the Fisher Transform Strategy video, the Fisher Transform Indicator is unbounded. So when the smaller pullback was actually the end of the pullback, there was no problem and the Fisher Transform’s faster signals gave multiple winning trades in a row. But when the smaller pullback was just a part of a bigger pullback in a trend, the Fisher Transform Indicator gave a decent amount of false signals by reacting to price faster.

The Fisher Transform is an excellent indicator, but it is a bit noisy compared to other slow-to-react but accurate indicators like MACD. Since the price doesn’t move like a stick, in the long run, the Fisher Transform gave more false signals and gave back most of the profit made at the beginning. Unlike many other indicators that performed well on their own and gave win rates as high as 58 and 62 percent on the Trading Rush Channel, the Fisher Transform is better used with other indicators as a confirmation. Like I said before, the Fisher Transform is a pretty accurate indicator, but noisier. So using it to confirm reversals at support and resistance areas is a good idea only if the price movement is good. If the price movement is choppy, looking at Fisher transform is not such a good idea. You will get a lot of false signals in a row.

The Fisher Transform Trading Strategy lost 15 trades in a row and won 8 trades in a row. After 100 trades, it got an approximate win rate of 42 percent with a 1.5 to 1 reward risk ratio. The win rate was good in the short term but average and lower than what some of you were expecting in the long term. Strategies that react to price movement faster can have a good winning streak and show a high win rate in the good market conditions, but then also give more false signals and a worse losing streak in the long run.

4.2+7+4+4+4.5

The Fisher Transform Strategy gets a TR Score of 23.7 out of 50, and ranks 24th from the top, below the Hull Moving Average with SMA Strategy, and above the Stochastic Trading Strategy. That’s all.

Fisher Transform Trading Strategy – How to use the Fisher Transform Indicator

Post author By Trading Rush
Post date May 13, 2021
2 Comments on Fisher Transform Trading Strategy – How to use the Fisher Transform Indicator

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Tag: Bollinger Bands

Imagine that there is a magical room and there is Bill the second. Every one minute, a different version of Bill the first, comes out of this magical room and asks Bill the second if he would like to buy or sell some apples at a certain price. The first version of Bill the first asks Bill the second if he would like to buy or sell an apple for 1 dollar. Bill the second who has no clue what’s going on, declines the offer. Then another version of Bill the first pops out of the magical room and offers to buy or sell an apple for 3 dollars. This version of Bill the first is willing to trade an apple for 2 dollars more than the previous Bill the first. Bill the second who still has no idea what’s going on, declines the offer, and another Bill the first pops out, then another, and another. Soon, Bill the Second notices that different versions of Bill the first are looking to trade apples at different prices. Some are looking to buy or sell as low as 1 dollar and some are willing to buy or sell a single apple for 10 dollars. But most versions of Bill the first are trading a single apple around 5 dollars.

After noticing this, Bill the second comes with an idea to get rich. When a version of Bill the first appears who is selling an apple far away from the average, let’s say for 1 dollar, Bill the second happily buys an apple. Then, since he knows most versions of Bill the first are looking to trade an apple around 5 dollars, Bill the second can wait for Bill the first to appear who is willing to buy an apple for 5 dollars or higher. Since the price stayed near the 5 dollars most of the time, Bill the second made money by buying when the price made a move significantly lower than the average and by selling when the price made a move significantly higher than the average.

In simple words, that’s pretty much what the Fisher Transform Indicator shows. Fisher Transform signals when the price has moved significantly by looking at recent price data. If you want to make money like Bill the second by trading when the price makes a significant move, the Fisher Transform Indicator is for you.

This is what it looks like on TradingView and will come with a default length of 9. It will also come with two lines called the Fisher and the Trigger line.

Similar to Bill the first example, Fisher Transform can be used to find reversals. But remember, unlike Bill the first example where versions of Bill the first were only buying and selling between 1 dollar and 10 dollars, the Fisher Transform is unbounded.

It means that the Fisher Transform value can go in one direction for a long time.

In the range market, when the Fisher Transform goes significantly below the zero line, it is a good idea to look for buying opportunities. Many traders also use the crossover of the Fisher and Trigger lines to generate entry signals. When the Fisher Line crosses above the Trigger Line below the zero line, it is a buy entry signal. When the Fisher Transform goes significantly above the zero line in the range market, it is a good idea to look for selling opportunities. Many traders will sell when the Fisher Line crosses below the Trigger Line above the zero line.

That’s good for the range market, but in an up-trending market, the Fisher Transform will give a lot of false short entry signals since the previous extreme highs are easily crossed. Similarly, there will be a lot of false long entry signals when the price is breaking the previous swing low in a downtrend.

So when the price is above the 200 EMA, many traders will only look for long signals and will buy when the Fisher Line gives a long crossover below the zero line. Set the stoploss below the pullback. And when the price is below the 200 EMA, many traders will sell when the Fisher Line gives a short crossover above the zero line. Set the stoploss above the pullback.

We will test this Fisher Transform Trading Strategy 100 times in the next video to find its win rate and to see how it compares with other trading strategies we have tested so far on the Trading Rush Channel.

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Why Bollinger Bands %B Trading Strategy is actually BAD after 100 TRADES?

Post author By Trading Rush
Post date May 12, 2021
3 Comments on Why Bollinger Bands 3B Trading Strategy is actually BAD after 100 TRADES?

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Does the Bollinger Bands Percent B Trading Strategy work in the Forex and Stock Market? I tested it 100 times to find its win rate, and here’s what happened.

“Keep trading simple!” You have probably heard that somewhere before. Even though keeping trading simple can avoid unnecessary confusion, not all simple things are always useful. As we saw in the Bollinger Bands Percent B strategy video, Percent B is more like a simpler version of Bollinger Bands. But when I tested that trading strategy 100 times, it made money, and the profit line made a higher swing high at the beginning, but after around the 20th trade, the profit line went in the sideways direction for a while. It gave some good entry signals in a row at the start of an uptrend, but in that same uptrend, especially near the end of the trend, it also gave multiple false signals in a row. Now obviously, near the end of the trend, most trading strategies will give false signals. But in comparison to some other strategies we have tested recently, the Bollinger Bands Percent B gave more false signals in a row.

The Williams Percent Range Trading Strategy we tested 100 times, gave 7 signals near the end of the same uptrend, out of which 5 trades were won and only 2 trades were lost. On the other hand, the Bollinger Bands Percent B strategy also gave 7 signals in the same uptrend, but only won a single trade, and lost 6 trades in a row. You see, in the Bollinger Bands Percent Range Trading Strategy, traders buy when the price breaks above the upper Bollinger Band in the uptrend, but because of this same entry condition, when the trend was coming to an end, many Bollinger Bands long signals, were almost at the top of the trend. In simple words, the entry conditions that were used to identify the increasing buying pressure in the uptrend were the reason for many late false signals when the trend was reversing or slowing down. In an uptrend, strategies that give signals near the end of the pullback, and not near the swing high, perform better in conditions like these.

The Bollinger Bands Percent B Strategy where the signals are taken at the breakout of 100 and zero, was not one of them. With a 1.5 to 1 reward risk ratio, it got a win rate of approximately 38 percent, which is one of the worse win rates we have seen so far. The initial account size was 10000, but it only lost 500 even after 100 trades. So it was not as bad as the Bollinger Bands with RSI Trading Strategy, where the profit graph was consistently going in the downward direction.

3.8+7.5+3.8+0+3.8

The Bollinger Bands Percent B Trading Strategy gets a TR Score of 18.9 out of 50 and ranks 36th from the top, and 5th from the bottom, below the first Fractal strategy, and above the CCI Trading Strategy.

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1 line Bollinger Bands Trading Strategy %B

Post author By Trading Rush
Post date May 11, 2021
2 Comments on 1 line Bollinger Bands Trading Strategy 2B

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This is the Bollinger Bands indicator, nothing special, you have most likely seen it many times. Beginners can find it difficult to read, it doesn’t look messy as the Ichimoku Cloud Indicator. This is the Bollinger Bands Percent B. And this indicator looks way easier to read than the normal Bollinger Bands indicator. The Bollinger Bands percent B, or Percent Bandwidth, is an indicator derived from the Bollinger Bands Indicator. When the price gets volatile, the Bollinger Bands move far away from each other. And when the price stays in a range and is less volatile, the upper and lower Bollinger Bands move closer to each other. If you don’t like the constant contraction and expansion of the Bollinger Bands, then the Bollinger Bands Percent B is for you. Even your dog can read Bollinger Bands with this. Here’s how it works.

Percent B will show the closing price of the candle as a percentage of the upper and lower Bollinger Bands.

In simple words, when the closing price is equal to the lower band of the Bollinger Bands, the Percent B value will be zero.

When the closing price of the candle is below the lower Bollinger Band, the Percent B value will be lower than zero.

When the closing price is equal to the upper band of the Bollinger Bands indicator, the Percent B value will be at 100 percent.

And when the closing price of the candle is above the upper Bollinger Bands, the Percent B value will be above 100 percent.

Also, if the closing price is equal to the middle line of the Bollinger Bands, Percent B will show a value of 50 percent.

With a normal Bollinger Bands indicator, we consider the price to be oversold when the price crosses below the lower Bollinger Band. And we consider the price to be overbought when the price crosses above the upper Bollinger Band.

But when the price is in an uptrend, the price crossing above the upper Bollinger Band doesn’t have to mean over-bought. In an uptrend, the price has a higher probability of moving in the upward direction, so many traders see the upper Bollinger Band crossover as a sign of increasing buying pressure in the trend, and not a sign to take a short position. A similar thing applies in the downtrend, just the opposite.

In the range market, since the Percent B is derived from the Bollinger Bands indicator, the Percent B value crossing above 100 and below 0 can indicate an overbought and oversold market respectively. But in an uptrend, the Percent B indicator will cross 100 percent multiple times indicating an increase in buying pressure. Percent B will indicate an increase in selling pressure by crossing below 0 percent in a downtrend.

So many traders will use a trend identifying indicator like the 200 period moving average, and will buy when the Percent B indicator crosses above 100 percent only if the price is above the 200 period moving average. When the Percent B indicator crosses below Zero Percent, many traders like to take a short position only if the trend indicator like the 200 period moving average is indicating a downtrend. In an uptrend, use the pullback and set the stoploss below it. And in the downtrend, set the stoploss above the pullback.

To see if this strategy makes money or not, we will test the Bollinger Bands Percent B Trading Strategy 100 Times in the next video, just like many other strategies we have tested on the Trading Rush Channel.

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I risked Keltner Channel Trading Strategy 100 TIMES and here’s what happened… Forex Day Trading

Post author By Trading Rush
Post date May 2, 2021
3 Comments on I risked Keltner Channel Trading Strategy 100 TIMES and here’s what happened… Forex Day Trading

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What’s the win rate of the Keltner Channels indicator that actually looks better than the Bollinger Bands indicator? In this video, I’m going to test the Keltner Channels Trading Strategy 100 times that I talked about in the previous video, to find its win rate and compare it with other strategies we have tested so far, and to see if it actually makes money or not. Also, in this video, I have improved the Keltner Channels Strategy a bit more, because while backtesting, I found out that, instead of taking buy signals at the first candle that crosses and closes above the upper Keltner Channels Band, it is better to take a long position when a candle opens and closes completely above the upper Band. And instead of selling when the first candle crosses and closes below the lower Keltner Channels Band, it is better to take a short position when the candle completely opens and closes below the lower Band. By doing this, you will filter some of the false signals that appear in a choppy market.

Keltner Channels was one of the most interesting indicators I have tested on the Trading Rush Channel, you will see why in a moment. At the start, when the price was in an uptrend, it won 10 trades in a row. It not only won multiple trades in a row, but also lost multiple trades in a row pretty much as soon as the win streak ended. In fact, it lost 17 trades in a row. If I remember correctly, 17 losses in a row is the highest losing streak we have seen on the Trading Rush Channel. We have tested many different strategies, but none of them had anything as high as 17 losses in a row even though they all were tested on almost the same market structure. But that’s not all. As I said, this indicator is one of the interesting indicators we have tested yet. One might think, after having these many losses in a row, no way this strategy is going to be profitable, but if you look at the profit graph, after winning and losing, the profit line went in an upward direction in almost a straight line. If it had not lost this one trade, the Keltner Channels Trading Strategy won almost 17 trades in a row.

Keltner Channels gives more signals in a short time period. It made a good profit when the price was in an uptrend at the start, but when the uptrend ended and the price started a downtrend, it had a losing streak because it gave multiple signals in a short period of time near the end of the trend. But here’s the thing, many traders in the live market, add to the position or take more trades when they notice a good trend, or when they are right about the trend direction. When they win multiple trades in a row, the profit graph looks similar to the winning streak the Keltner Channels Strategy had in a good trend, but when you start losing multiple trades in a row, you don’t take more trades in the market. In other words, even though the Keltner Channels had 17 losing trades in a row because it gave multiple signals near the end of the trend, in the live market, you are most likely going to stop after getting few losing trades in a row in the same trend.

Because of this, Keltner Channels Trading Strategy that we discussed in the previous video has a great potential to achieve a higher win rate, as long as you stop taking more trades in a short time if you have already had around 5 losses in a row.

In this experiment, even after losing 17 trades in a row, it still managed to make money after 100 trades, and got a 49 percent approximate win rate with a 1.5 to 1 reward risk ratio. In the Trading Rush App, it made a profit of 2250 with an account size of 10000 and with 1 percent risk per trade of course.

5.8+7+4.5+4+6

And the Keltner Channels Trading Strategy gets a TR Score of 27.3 out of 50. And if you come to the Official Trading Rush Website, you will see it ranks 17th from the top, just above the RSI Supertrend Trading Strategy, and below the Bollinger Bands Strategy. Now it ranks below the Bollinger Bands strategy, because the Bollinger Bands we tested was a slightly different and difficult strategy, and because the Keltner Channels lost few points in the reliability and consistent profits category because it had 17 losing trades in a row. When it comes to the Easy to Use Category, the Keltner Channels easily takes the lead. Overall, the Keltner Channel is a good indicator with great potential.

That’s all.

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THIS IS WAY BETTER THAN BOLLINGER BANDS (1/30)

Post author By Trading Rush
Post date May 1, 2021
2 Comments on THIS IS WAY BETTER THAN BOLLINGER BANDS (1/30)

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You are most likely familiar with the Bollinger Bands indicator. It is one of those popular indicators that is pushed towards the beginner Stock Market and Forex Day Traders. But the Bollinger Bands is not always useful, especially if you are a trend trader. Imagine that Bollinger Bands is this road, and this middle line is the middle line of the Bollinger bands and the edges of the road are the outer Bollinger bands lines. If Bill the second was the price, and if the price didn’t move much up or down, the upper and lower bands of the Bollinger bands will move closer or pretty much stay at the same place.

Let’s say, when the price breaks out of a range or gives signs of a strong trend after a slow-moving market, you wanted to enter as soon as possible.

But if bill the second, or in other words, if the price decides to break out of the range, and starts a new trend, the outer Bollinger bands will expand. But we don’t want that. We want to enter at the start of the trend, and sure we can use other trend indicators, But what if the Bollinger bands, instead of expanding with the price, would have stayed at pretty much the same place when the price starts a new trend?

This is the normal Bollinger bands on an up-trending chart, and sure, one can say when the price is trending, we can take the trade as soon as the price breaks above the upper Bollinger band, it is a sign of increasing buying pressure in an uptrend and we can take a long position. That’s good, but this is better. This indicator looks similar to the Bollinger Bands indicator, but as you can see, the upper and lower lines are staying close to each other, and when there is a good trend going on, the price stays outside of the channel. In many cases and in this case, when the price started a good move in the upper direction, the breakout of the upper bands was earlier than the Bollinger Bands, and the price stayed above the upper bands for the most part of the uptrend. This is the Keltner Channels, and I’m going to test it 100 Times in the next video to find its win rate, just like we have tested many other strategies 100 times on the Trading Rush channel.

The middle line of the Keltner Channels is a simple or exponential moving average. But this time, the upper and lower bands are usually set two times the ATR value. So they do move away and closer to each other when the price starts trending and ranging respectively, but not like the Bollinger Bands Indicator, which makes them perfect for avoiding the ranging and trading the trending markets.

The 200 period exponential moving average will show the long-term trend direction. If the price is staying above the moving average, we will wait for the price to break and close above the upper band of the Keltner Channels, and we will enter a long position at the first candle that breaks above the upper band.

When the price is staying below the 200 period exponential moving average, we will wait for the price to break and close below the lower band of the Keltner Channels, and we will create a short position at the first candle that breaks below the lower band.

Since this is a trend following strategy, in the long setup, set the stoploss below the pullback. And in the short setup, set the stoploss above the pullback of the trend.

We will test this strategy 100 Times to find its win rate in the next video. Subscribe to Trading Rush and ring the notification bell to see that. Thanks.

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Bollinger Bands + RSI Trading Strategy tested 100 TIMES – Will this make PROFIT for you?

Post author By Trading Rush
Post date October 25, 2020

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Can you make money with the RSI and Bollinger Bands trading strategy? No not with RSI and Bollinger bands separately, because I have already tested the Bollinger bands indicator and the RSI trading strategy 100 times, they both had a profitable win rate. With a reward to risk ratio of 1.5 to 1, Bollinger bands had a win rate of approximately 55 percent, and the RSI had a win rate of approximately 49 percent. But what if we combine these two trading indicators, will the win rate go up? Well, why don’t we find out. In this video, I’m going to test the Bollinger bands RSI trading strategy 100 times, to find its approximate win rate.

In the RSI strategy that had a profitable win rate, the long entry signals were taken, when the RSI crosses above the 30 level. And short entry signals were taken when the RSI line crosses below the 70 level.

In the Bollinger Bands strategy that also had a profitable win rate, buy entry signals were taken, when a buy candlestick pattern is formed after price crossed below the lower bollinger band. And sell signals were taken when a sell candlestick pattern is formed after price crossed above the upper bollinger band. Furthermore, a 200 period moving average was used to find the direction of the long term trend.

But when you combine these two trading strategies, things become a little bit different. In the Bollinger Bands RSI strategy, a buy entry signal is at the first candle that closes above the middle bollinger band, soon after RSI was over sold. RSI value below 30 is considered to be over sold. Furthermore, a good portion of the candle has to close above the middle bollinger band, a slight touch will be considered as invalid.

Similarly, a sell entry signal is at the first candle that closes below the middle bollinger band, soon after RSI was over bought. RSI value above 70 is considered as over bought. And, a good portion of the candle has to close below the middle bollinger band.

For example, in this long setup, the RSI went oversold, then the price made a move up. Your entry is at the first candle that closes above the middle Bollinger band. You can set the stoploss below the lower bollinger band.

In this short setup, the RSI went above 70, then price made a move down. Your entry is at candle that closes below the middle bollinger band. Stoploss goes above the upper bollinger band.

Now you might be thinking, what’s the point of using the Bollinger bands with the RSI indicator? Well, some people like to combine these two indicators to filter some of the false signals. Remember, RSI on its own was a profitable strategy. So when you use it with the bollinger bands, you are filtering some of the false signals that bollinger bands gives in some conditions. Bollinger Bands on its own was also a profitable strategy, but in the bollinger bands strategy video, we used it as a trend following indicator with the help of a 200 period moving average. When you combine the bollinger bands with the RSI indicator however, you cannot use the 200 period moving average to find the trend direction, because this strategy doesn’t give a lot of entry signals when used with a 200 period moving average. In other words, Bollinger Bands RSI strategy, is a reversal trading strategy.

We have tested most indicators on the Trading Rush channel in the direction of the trend, and because of that, many indicators performed really well. Since Bollinger Bands RSI strategy is not exactly a long term trend following strategy, will it perform any good after testing 100 times? Well, I tested it 100 times and here are the results.

Number 1. When we took 100 trades with the Bollinger bands strategy, the strategy was successful in the long run, because we traded in the direction of the trend and took trades at the end of a pullback. We also had a relatively smaller stoploss. When an entry signal according to the bollinger bands strategy was wrong, the trade was lost quickly because the stoploss that was set according to the bollinger bands strategy was small. But when price made a decent move in our favor, the profit was booked with 1.5 times more than the potential loss.

RSI strategy on its own was also profitable, because the stoploss that was set according to the RSI trading strategy was small and the reward risk ratio was good.

In the Bollinger Bands RSI strategy however, the stoploss is relatively bigger. So price has to make a really good move for the trade to achieve a good reward risk ratio.

So in other words, the things that made the Bollinger Band and the RSI strategy profitable on their own, are different in this strategy.

For example, in this buy setup, the entry according to the Bollinger Bands RSI strategy, is at the first candle that closed above the middle Bollinger band, after RSI crossed above the 30 level. Stoploss is below the lower Bollinger band.

Now, according to the RSI strategy, entry is right here when RSI line crossed above 30.

As you can see, RSI combined with bollinger bands strategy gives a late signal when compared to the signals RSI gives on its own. Late entry is not a big problem if the trade is taken in the direction of the long term trend, because price usually makes a big move in the direction of the trend. But as you already know, Bollinger Bands RSI strategy is not a trend following strategy. If you try to use the 200 period moving average, it won’t give a lot of entry signals. and because of this, the Bollinger Bands RSI strategy gives a lot of false signals. When the market was moving sideways and was in a big range, the strategy was performing ok. But when market started trending, and since this strategy doesn’t filter false signals in a trend like other strategies do, this trading strategy had a lot of losing trades in a row, when compared to other strategies we have tested on this channel.

You can use your own way of setting the stoploss and profit target to improve this strategy. Just remember that your results can be different if you use different entry and stoploss conditions. So remember to backtest your trading strategy before using it in the liive markets. You can use the Official Trading Rush App to do that. RSI when combined with the Bollinger Bands like this, doesn’t give a profitable win rate that you can make money with in the long run.

In fact, after 100 trades, the profit graph in the Trading Rush app didn’t go up. With a reward risk ratio of 1.5 to 1, the win rate of the Bollinger Bands RSI strategy I got in this backtest, was approximately 35 percent. This is one of the worst win rates we have gotten so far. There are strategies on the Trading Rush Channel that gave approximate win rates more than 55 percent. The profit graph also looks like a downtrend. At one point, this strategy gave 11 false signals in a row. RSI and Bollinger Bands on their own had better win rates than this.

I tested Bollinger Bands Trading Strategy 100 TIMES

Post author By Trading Rush
Post date July 8, 2020

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Tag: Bollinger Bands

Bollinger Bands Trading Strategy also known as Bollinger Bands Indicator Strategy for Stock Trading and Forex Trading Tested 100 Times so you can know the real profit potential and make money in Intraday trading and Swing Trades. Can Bollinger Bands Strategy Indicator be profitable.

Does bollinger bands trading strategy even work? Are online trading guru’s telling you false information? I have wasted years testing every trading strategy out there, before i found the right one, that worked! I’ve created this channel to expose every strategy, and show their real probabilities, so you don’t have to waste your precious time like i did! I’m not here to sell any kind of online course, I’m just here to help you in your Stock trading and Forex trading career. If you find this video helpful, consider subscribing to support the channel! In this video i will back-test 100 times, a very famous trading strategy called the bollinger bands strategy. Yes you heard it right. testing 100 times takes time, and will most likely prove, if you should risk your hard earned money, using this strategy!

For those who are new to trading, this is what bollinger bands indicator looks like. By default bollinger bands will come with a moving average in the middle, and two bands around it, called the upper band and the lower band. In simple words, this is what bollinger bands mean. If you plot this indicator on a trading chart, the middle line will indicate the average price of the stock, and price will most likely stay inside the bollinger bands.
Strategy to take trade using this indicator is really simple. If the price crosses the upper bollinger band, the market is considered as over extended, and we should look to sell, since the price can move towards the average line.

So, the question is. If you enter trades using bollinger bands indicator, will you become a profitable trader?

In the next few minutes, i will show you how the profit graph looks like after taking 100 trades, and how much is the real winning percentage of the bollinger bands strategy, and how many losers you can expect in a row. I will fast forward the next clip to save your time. The following clip can help you understand, how this strategy looks in different market conditions, so do watch carefully.

For back testing, i have used Euro JPY chart. This strategy works on any time frame, and also works on both forex, and stock markets. Here, I’m using 30 minutes time frame. I’m also taking sell setup in this example. Strategy for sell setup is very similar to buy setup. Sell setup is just opposite of buy setup.
You can see how the win rate and profit graph changes, as i take more trades. The real win rate will be revealed when we reach 100 trades or more. There are different ways to set profit targets. Here in this example, profit target was set 1.5 times more, than the risk i was taking. You should always take profit, more than the risk you are willing the take!

As you can see on the left, for back testing, i’m using 10000, as my starting balance. Also, I’m only risking 1 percent of my account balance, on a single trade. You should only risk 1 to 2 percent of your account, on a single trade. Otherwise it will be difficult to handle losing trades, that will come in a row. Money management is the key to success in this business! In this example. When i lose, i only lose 100. But when i win, i win 150. So, even if i lose one and win one, i will still make money.
Some strategies work on intra day only and some work better on daily time frame. This strategy however, works on all time frames.

It took me around 1 hour to back test 100 trades, and while testing, some trades almost came close to hitting the stop loss, before going back and hitting profit targets. Don’t panic when market is very close to hitting your stop loss. Losing is part of trading. Whole point of making this video, was to show you the number of losers, you can have in a strategy. No strategy works 100 percent of time. Even professional traders use strategies, that only work 60 to 65 percent of time. As i always say, The key to make money is money management, and trading psychology! Master that, and you can become a professional.

That’s all. Now you know the win rate of the bollinger band strategy. Remember, I took trades based on Bollinger bands and 200 period Moving average. If you use different setup, your win rate may be different than this.

If you want me to test, any other trading strategy 100 times, Subscribe to the channel.

And remember to ring that notification bell as well, so you don’t miss any new videos.
Thanks for watching.

Tag: Bollinger Bands

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