• Registered: 2013-06-12
  • Posts: 20

Topic: Help setting up a simple Bollinger Band strategy

Hi

Could someone help me set up a very simple Bollinger Band strategy? I'm trying to learn how to use FSB.

Strategy:
1. Go long a the lower band of a 2 standard deviation Bollinger Band
2. Stop loss at the lower band of a 3 standard deviation Bollinger Band
3. Take profit at the middle line of a 2 standard deviation Bollinger Band
4. Risk 1% per trade

If anyone could help me with this I'd really appreciate it.

Thanks!

Pete

  • footon
  • footon
  • ◄≡≡≡►
  • Offline
  • Registered: 2009-08-17
  • Posts: 2,968

Re: Help setting up a simple Bollinger Band strategy

To make it work as intended, you have to choose either point 2 or 3, can't have them both I'm afraid.

There is a workaround though, but it will introduce lag. If higher timeframes are used, it most probably won't work out.

One comment about "the middle line of a 2 standard deviation Bollinger Band" - it's a simple moving average, deviation parameter works for the bands only.

You could try this workaround:

[Opening Point of the Position]
Bollinger Bands
     Enter long at the Lower Band
     Smoothing method  -  Simple
     Base price  -  Close
     MA period  -  20
     Multiplier  -  2.00
     Use previous bar value  -  Yes

[Closing Point of the Position]
Bar Closing
     Exit the market at the end of the bar
     Base price  -  Close

[Closing Logic Condition]
Bollinger Bands
     [ a ]   The bar closes below the Lower Band
     Smoothing method  -  Simple
     Base price  -  Close
     MA period  -  20
     Multiplier  -  3.00
     Use previous bar value  -  No

[Closing Logic Condition]
Moving Average
     [ b ]   The bar closes above the Moving Average
     Smoothing method  -  Simple
     Base price  -  Close
     Period  -  20
     Shift  -  0
     Use previous bar value  -  No

  • Registered: 2013-06-12
  • Posts: 20

Re: Help setting up a simple Bollinger Band strategy

footon wrote:

To make it work as intended, you have to choose either point 2 or 3, can't have them both I'm afraid.

There is a workaround though, but it will introduce lag. If higher timeframes are used, it most probably won't work out.

One comment about "the middle line of a 2 standard deviation Bollinger Band" - it's a simple moving average, deviation parameter works for the bands only.

Thank you so much!!! Of course the middle of a BB is a SMA - how stupid of me!!!  I'll back test this over the weekend - my idea is to trade a 5 min timeframe during the Asian session when  pairs usually range.

PS Footon - your Better Bollinger Bands custom indicator throws up a few errors when you load it with the latest version of FSB:

Custom Indicators
File name: Better Bollinger bands.cs
ERROR: Indicator compilation failed in file [Better Bollinger bands.cs]
Line 13 Column 28: The type or namespace name 'Infrastructure' does not exist in the namespace 'ForexStrategyBuilder' (are you missing an assembly reference?).
Line 14 Column 28: The type or namespace name 'Infrastructure' does not exist in the namespace 'ForexStrategyBuilder' (are you missing an assembly reference?).
Line 15 Column 28: The type or namespace name 'Infrastructure' does not exist in the namespace 'ForexStrategyBuilder' (are you missing an assembly reference?).
Line 19 Column 41: The type or namespace name 'Indicator' could not be found (are you missing a using directive or an assembly reference?).
Line 31 Column 41: The type or namespace name 'SlotTypes' could not be found (are you missing a using directive or an assembly reference?).
Line 121 Column 40: The type or namespace name 'IDataSet' could not be found (are you missing a using directive or an assembly reference?).

  • footon
  • footon
  • ◄≡≡≡►
  • Offline
  • Registered: 2009-08-17
  • Posts: 2,968

Re: Help setting up a simple Bollinger Band strategy

Pete, I think the indi is fine, but the confusion lies in different versions. Newest betas or RC versions are V3, therefore indis have to support V3. But there are 2 type of indis circulating now - the old version (V2) and the new one (V3).

I think you downloaded Better Bollinger from my indi thread, which includes V2 indis, and put it in the V3 FSB, hence the errors.

To sort it out head to the repository and download the V3 version of Better Bollinger.

It could be the other way round - you're using V2 FSB with V3 indicator. Then hop in to my indi corner and download Better Bollinger from there: http://forexsb.com/forum/post/15959/#p15959

  • Registered: 2013-06-12
  • Posts: 20

Re: Help setting up a simple Bollinger Band strategy

Thanks, you've been a great help.

I backtested the above BB strategy and it performs dismally, even though it looks quite good visually.  Not sure why, I think it has to do with the way FSB backtests using bar open???  I'll do some more investigation over the weekend and report back if I can make it profitable.