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[mebejason]

Anyone use the BB squeeze strategy?
I've been using for quite a while now with remarkable (for a small-fry like me) success.

Looking for ways to "tweak" my current strategy....

[Paulolion]

I don´t think i know how that strategy works, but then again i´m just a newbie.

Care to share that strategy? You see, everytime i tried to use BB i get terrible results, even during the asian session, wich is intented to be slower and there is more ranging to be seen.

[robrundle]

Hi Mebejason,
Great avatar!
Could you forward me the 'BB squeeze' strategy that you are using?
Regards Rob.

[midastrader]

No, I don't use the BB squeeze strategy?
Why?
I don't know it.

[rollingstone]

This link gives a fair explanation

http://www.investopedia.com/articles.../04/030304.asp


http://www.technical-analysis.com/le...rBreakOut.html

[rollingstone]

This is the best I can find with a quick search

http://www.actionforex.com/articles_...llinger_bands/

[mebejason]

Here's my Bolinger Band squeeze strategy, maybe someone can poke holes in it...

I'm trading the usual lack of movement in the currency pairs - specifically the EURUSD, GBPUSD and USDCHF during the "off hours" due to the size of the Atlantic Ocean (time diff between US & Europe). This lack of movement occurs a few times a week. The time I find most beneficial is around 9-10pm PST. I'm on the US West coast, so I see this quite a bit. This is usually just a visual obervation on a 15m chart, but I look for a sustained lack of price movement - say 10+ candles, or more. What I look for is a horizontal "pipe" or flatline, as the currency could only fluctuate between 15-25pips up/down. You'll know it when you see it -- try looking at the EURUSD 15m chart from a couple days ago. Starting on April 3, at around 6pm PST it began popping around between 1.2900 and 1.2880, and it couldn't break either BB. This is a great example of the squeeze that I trade. The theory is that immediately following a squeeze, you'll see a breakout - sometimes it's not a BIG breakout, but enough to squeeze (sorry for the pun) out 20pips consistently. Anyway, when I see a sustained "squeeze", I straddle the squeeze - meaning, I place an entry order to buy at 20pip above the top of the squeeze, (in this case around 1.2920) and an entry order to sell at 20pips below the squeeze, (in this case around 1.2860). Both entry orders have a stop at the middle of the squeeze. (1.9890) When the squeeze breaks out, one of my orders will open, and I cancel the other entry order. Usually, I only go for 10-20 pips (depending upon my greed factor for the day) .

I have been trading this strategy EXCLUSIVELY over the last few weeks.
I am also a newbie, and I find this to be much less stressful than trying to "pick a direction". It allows me to have the market tell me where it wants to go, and I just follow it. Some may say that I'm employing a strategy that doesn't allow for BIG wins, but I'll take a few small wins any day of the week.

FYI - my accuracy rate is over 90%. I traded this 13 times over the last 5 weeks, and I stopped out only once (because I went for 30pips, instead of my usual 10-20)

If anyone can poke holes in my strategy, please - I am looking for ways to improve upon it...

[Gookarachie]

This is interesting. I am going to have to take a look at this tomarrow.

I too am on the west coast(PST). So most of the day is just side ways. It sucks. I see most of the bigger moves happen around 0500 our time though. So if you want to get up early and trade that would be a good time.

I have been working on a method that will work in out time zone. I will let you know what it is after I get it working.

What period and deviation do you set you BB's at?

[mebejason]

I use 20periods, 2.0 deviations. Don't know that is relavent though. My feeble understanding is that we are capitalizing upon bull/bear pressure building up, then exploding. --Not necessarily about the BBs themselves.

I'd love to hear what you come up with!

[Medran]

Originally Posted by mebejason

Anyone use the BB squeeze strategy?
I've been using for quite a while now with remarkable (for a small-fry like me) success.

Looking for ways to "tweak" my current strategy....

Hi Mebejason

The definitive spiel on the Bollinger Squeeze is "Bollinger on Bollinger Bands" by John Bollinger (of course). A wonderful read and highly recommended.

But just like most things in the trading world the theory is absurdly simple.

"The price he go up a bit, the price he go down a bit" is what it is all about and if you get heads or tails right you are on the road to riches. What bands (and all channels) do is measure the indecision in the market. The "should I or shouldn't I" factor. The Bollinger Squeeze is a state of market dither. The bears and bulls just can't make their mind up so when they do the time is right for an explosion.

You don't need Bollinger Bands to do this... try Donchian Channels or a simple Moving Average +- channel to see the same thing. The idea is that when the channel narrows you set buys and sells just outside the channel and wait for fireworks. For my money Richard Donchian gets the gold prize for channels but all channel trading strategies count amongst the best... and they work best when the market ISN'T trending (and that is 70% of the time according to the great and the good - who are wrong but that's another story).

BB Good, Donchian Great Guy Too, Moving Average Channels - awesome. This is an area of techincal analysis you just can't ignore.

Just to harp back to Richard Donchian for a moment, He died in 1993 and established the Richard Donchian Foundation http://www.rddonchian.org/. Whatever you think, he left behind a great legacy in more ways than one. Wouldn't we all like to do something like that?

Have fun


Medran

[Gookarachie]

I like it. It seems to work well. However there just isn't enough trading(pips) in it for me. If it fits your style then go for it.

You should listen to Medran. Read those books. It may shed some new light onto your method.

Happy trading!

[Paulolion]

Thanks for sharing your strategy


Best of Luck

[Paulolion]

By the way Gookarachie,

if that´s too litle pips for you, what do you use as a strategy for getting more pips.

I´m really interested in hearing that since i would really love to win 10 pips per trade with a win ratio of 90%, if you got anything better, please do post

[mebejason]

Let's not get carried away, Paulolion.

I have a success rate of +90%--yes. With an average pips gained of 10+ per trade--yes. But I've only done it 16 times now. Before I declare to the world that my strategy works, I'd like to get at least 30-40 trades behind me with this strategy. I am trading ONLY this method for a few weeks, (it's not easy to ignore other opportunites, believe me), but it's a trade I'm comfortable with and (so far) it works.

BTW it's 04/07/05 @ 1:50am GMT.
The EURUSD, the USDJPY and the USDCHF are ALL squeezing on the 15m chart right now!
I'll let you know....

[mebejason]

Oh yeah, thanks Medran!