Bounce Coming In Gold and Silver?
Updated
I have had very good consistent results with this strategy however I have done my due diligence and back tested it thoroughly to fully understand all the variable and what the best way to use it is, so please do your back testing as well. As some of you know I am currently short on Silver -1.16%so I will be using the results of this trade to manage my current position and I will explain how I plan to use it below.
Bollinger Band trade- Reason's for Entry (These reasons for entry are not valid until we get a daily close inside the BB)
-We have 3 Clear daily closes outside of the Bollinger Bands which typically signals that price may reverse. using this alone wont help as you can see that had you bought on the first close outside of the Bollinger band you would have possibly had a losing trade.
-We can dramatically increase the probabilities of this trade by waiting for price to close back inside the Bollinger Bands . In this case, we would need a daily close back inside the BB or you could place your order a minute before the close if you are confident price will close back in the bands. This rule is crucial.
-We have the 200 day simple moving average directly above the 20 day SMA .
-We have a 1.27 and a 1.414 Fib Extension that comes in perfect contact with the 20 SMA and the 200 SMA . (This is called Confluence)
-We have a zone of Support and Resistance in this area as well, marked by the yellow rectangle covering the moving averages .
-The Stochastics indicator is showing extremely oversold conditions. (please read the text on the last chart to understand exactly how I use the Stoch overbought/oversold levels.
Price typically reverses back to the 20 day period moving average . You can use the 20 period simple moving average as a target and even the upper Bollinger band but it is crucial to test these Targets!
you can use ATR to determine stops or simply pick a price but backtesting is really required when it comes to stop placements.
We have not yet had a daily close back inside the Bollinger Bands so I would not enter this trade until that happens. As I mentioned earlier, I am currently short on Silver -1.16%due to a Bearish Cypher pattern completion on the Daily chart that I published a few weeks ago (idea link below). That trade was successful in hitting target 1 at the . 382 retracement and now I am waiting for target 2 at the . 618 retracement . I will use this trade idea to manage my existing trade via the results. If price comes back up to the 20 or 200 day SMA and then gets rejected I will most likely be adding to my position as that will have painted a lower high on the Daily chart which could signal a continuation of the weekly downtrend that we are in.
-If price reaches the top band then I will assume that the buyers are strong due to the fact that there was enough buying to break through all of those SMA's and Fib levels. Price reaching the top band will also confirm a higher low and higher high on the daily chart .
-if price goes sideways up at the moving averages for more than a couple days then I will also assume that the buyers are strong.
If anyone has any question, please leave a comment and I will be sure to reply. I will be releasing a couple free tutorials on tradingview this month. On Wednesday March 22nd I will be releasing a Cypher Pattern Tutorial to teach how to identify and trade the Cypher Pattern profitable, how to backtest the Cypher pattern on individual ticker symbols, and much much more. this will be an interactive Tutorial so make sure you have a pen and paper handy if that is something you would like to participate in also.
I will also be releasing a tutorial explaining exactly how I use this Bollinger Band strategy and what my rules are that allow me to trade the markets consistently.
Thank you all. I hope this was helpful!
Bollinger Band trade- Reason's for Entry (These reasons for entry are not valid until we get a daily close inside the BB)
-We have 3 Clear daily closes outside of the Bollinger Bands which typically signals that price may reverse. using this alone wont help as you can see that had you bought on the first close outside of the Bollinger band you would have possibly had a losing trade.
-We can dramatically increase the probabilities of this trade by waiting for price to close back inside the Bollinger Bands . In this case, we would need a daily close back inside the BB or you could place your order a minute before the close if you are confident price will close back in the bands. This rule is crucial.
-We have the 200 day simple moving average directly above the 20 day SMA .
-We have a 1.27 and a 1.414 Fib Extension that comes in perfect contact with the 20 SMA and the 200 SMA . (This is called Confluence)
-We have a zone of Support and Resistance in this area as well, marked by the yellow rectangle covering the moving averages .
-The Stochastics indicator is showing extremely oversold conditions. (please read the text on the last chart to understand exactly how I use the Stoch overbought/oversold levels.
Price typically reverses back to the 20 day period moving average . You can use the 20 period simple moving average as a target and even the upper Bollinger band but it is crucial to test these Targets!
you can use ATR to determine stops or simply pick a price but backtesting is really required when it comes to stop placements.
We have not yet had a daily close back inside the Bollinger Bands so I would not enter this trade until that happens. As I mentioned earlier, I am currently short on Silver -1.16%due to a Bearish Cypher pattern completion on the Daily chart that I published a few weeks ago (idea link below). That trade was successful in hitting target 1 at the . 382 retracement and now I am waiting for target 2 at the . 618 retracement . I will use this trade idea to manage my existing trade via the results. If price comes back up to the 20 or 200 day SMA and then gets rejected I will most likely be adding to my position as that will have painted a lower high on the Daily chart which could signal a continuation of the weekly downtrend that we are in.
-If price reaches the top band then I will assume that the buyers are strong due to the fact that there was enough buying to break through all of those SMA's and Fib levels. Price reaching the top band will also confirm a higher low and higher high on the daily chart .
-if price goes sideways up at the moving averages for more than a couple days then I will also assume that the buyers are strong.
If anyone has any question, please leave a comment and I will be sure to reply. I will be releasing a couple free tutorials on tradingview this month. On Wednesday March 22nd I will be releasing a Cypher Pattern Tutorial to teach how to identify and trade the Cypher Pattern profitable, how to backtest the Cypher pattern on individual ticker symbols, and much much more. this will be an interactive Tutorial so make sure you have a pen and paper handy if that is something you would like to participate in also.
I will also be releasing a tutorial explaining exactly how I use this Bollinger Band strategy and what my rules are that allow me to trade the markets consistently.
Thank you all. I hope this was helpful!
Trade closed: target reached
Hey Everyone, Targets have been met on the recent "Bollinger Band Close Outside strategy" trade. Price Closed back inside the Bollinger Bands shortly after I published the trade idea and now price has reached Targets set at 20 period SMA! good luck trading and,$MMAKE SOME MONEY$$
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