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Strategies & Market Trends : Ask DrBob

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To: Drbob512 who started this subject	6/30/2001 11:40:55 AM
From: broadstbull	Read Replies (2) of 100058

Iowa Nothing wrong with questioning the validity of a trading system, IMO. One thing you may be missing is that there is no one from of TA. I personally used Bollinger bands, since I'm a dip buyer. Some folks like Moving averages, some look for patterns. Nothing is 100%. If you are looking for and indicator to predict turnarounds fairly accurately, you may want to start using 20 day Bollinger bands with 2 and 3 standard deviations. A security or index hitting a 2 SD BB has something like a 68% chance of reversing, mathematically. If it hits a 3 SD band it is getting into the 96% probability range of a turnaround. I'd like to add that due to the extreme nature of forced selling by funds this year(redemtions in April) the lower bands were not effective for trading. Now that we are in a trading range they are pretty effective. Also, the Arms index has been THE most effective measurement of bottoms so far this year. But, you knew that already, LOL. Peace

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