AdhigamaTrading

Double Bollinger Band Strategy :

Education
NSE:NIFTY   Nifty 50 Index
Double Bolliger band Strategy :

Tried to put in best easy way in the chart and simple explanation below :

What we need :

Two Bollinger Bands
1. Length 20 and StdDev 1
2. Length 20 and StdDev 3

Confirmation with indicators should be in same trend with candle stick trend
1. RSI (For trend identification)
2. Stoch (Entry and Exit confirmations / Overbought and Oversold confirmations)

Risk Reward Ratio : 1:2 or 1:1.5 or as per your risk appetite, above ones shown with 1: 2 RR

Rules of the game :

When ever candle stick crosses above/below BB with StdDev 1, that’s the entry. Any candle after this should be used as entry point above the earlier candle which crossed BB with StdDev 1, stop loss should be the candle stick (candle stick which crossed) high or low (sell/buy respectively) or middle line of Bollinger band which ever are nearer. Take profit is 1 : 2 or as per the risk appetite.

Avoid when :
• Long wicks or long candles which crossed the BB with StdDev 1
• If the candle stick trend is not matching with RSI / Stoch (all should be in following same trend path)
• If we don’t get entry within 2 candle sticks after the candle stick which crossed above/below BB with Std Dev 1

Stop Loss : Stop loss is the key here, please do not enter unless you understand how to calculate stop loss. Calculate Stop loss first before entry and it should be minimal say not beyond 40 points in Nifty as an example / acceptable loss in above example chart.

Result : Out of 7 entries 1 hit SL while 6 won. 7 wins with 80 points each vs 1 SL with 40 points make to 520 points gain overall.

Please do let me know if you have any questions would be happy to respond.

Please do like and share this idea. Thanks

Disclaimer : This analysis/strategy is only for educational purpose and not be considered as any trading idea/tip. Please consult your financial advisor before you take any trade and we are no way responsible for your profits/losses. Thank you!


Comment: Empirical Rule
68% of Data will fall in with 1 Standard Deviation
95% of Data will fall with 2 Standard Deviation
99.7% of Data will fall with 3 Standard Deviation

Default BB StdDev will be 2
what we used in 1 and 3 to capture the extremes and benefit out of it, that means 68 to 99.7% .. this is the logic behind above strategy
Comment: Today we got an entry at 12 15 for a 75 points gain.

Comment: Today 8th Nov 2021 and we got one setup with this strategy :

Comment:
Comment: 10th Nov... we did not get the setup ... no entry
Comment: 11th Nove... we got one entry ...86 points gain .. RR 1:2; RR 1:5 ideal in the kind of market we are into this week....

Comment: 12th Nov, got one entry for a 99 points gain with RR 1:3

Comment: 15th Nov... we did not get the setup ... no entry
Comment: 16th Nov... there is a strong support at 18050,

Comment: 17th Nov, two entries, one with SL cost to cost and other one 50 points gain,

Comment: 18th Nov... we did not get the setup ... no entry
Comment: 23rd Nov, two entries, one with SL 34 points and other one 85 points gain for a RR 1:2,
15 mins chart

5 mins chart for entry and exit

Comment: Nifty

Comment: 25th and 26th Nov... we did not get the setup ... no entry