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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: freeus who wrote (3339)	9/23/2000 11:21:10 PM
From: Dealer	Read Replies (1) \| Respond to of 65232

He started the Bolinger Bands. He use to (8-10 years) work for CNBC and was on daily and discovered these up and down bands for a stock......don't really understand them completely......I am always printing out his stuff and never can find the time to read it and study it. dealie &hearts;

To: freeus who wrote (3339)	9/23/2000 11:23:56 PM
From: Jim Willie CB	Read Replies (1) \| Respond to of 65232

John Bollinger is a foremost technical analyst of the stock market he coined the "Bollinger Band" which identifies upper and lower ranges based upon standard deviations of recent daily trading this is useful in pointing to extreme oversold, overbought he is an invited guest on CNBC and CNNfn frequently when he talks, it is worth it to your account to listen / Jim

To: freeus who wrote (3339)	9/23/2000 11:30:02 PM
From: Dealer	Read Replies (3) \| Respond to of 65232

John Bolinger Bands: e-analytics.com Bollinger Bands are envelopes which surround the price bars on a chart. Bollinger Bands are plotted two standard deviations away from a simple moving average. This is the primary difference between Bollinger Bands and envelopes. Envelopes are plotted a fixed percentage above and below a moving average. Because standard deviation is a measure of volatility, the Bollinger Bands adjust themselves to the market conditions. They widen during volatile market periods and contract during less volatile periods. Bollinger Bands become moving standard deviation bands. Bollinger Bands are sometimes displayed with a third line. This is the simple moving average line. The time period for this moving average can vary. However, Mr. Bollinger recommends 10 days for short term trading, 20 days for intermediate term trading, and 50 days for longer term trading. Additionally, the standard deviation value can be varied. Many technicians increase the value of the standard deviation from 2 standard deviations to 2-1/2 standard deviations away from the moving average when using a 50 day moving average. Conversely, many technicians lower the value of the standard deviation from 2 to 1-1/2 standard deviations away from the moving average when using a 10 day moving average. An important thing to keep in mind is that Bollinger Bands do not generate buy and sell signals alone. They should be used with another indicator. I prefer to use Bollinger Bands with RSI. This is because when price touches one of the bands, it could indicate one of two things. It could indicate a continuation of the trend; or it could indicate a reaction the other way. So Bollinger Bands used by themselves do not provide all of what technicians need to know. Which is when to buy and sell. MACD can be substituted for RSI. However, when combined with an indicator such as RSI, they become quite powerful. RSI is an excellent indicator with respect to overbought and oversold conditions. Generally, when price touches the upper Bollinger Band, and RSI is below 70, we have an indication that the trend will continue. Conversely, when price touches the lower Bollinger Band, and RSI is above 30, we have an indication that the trend should continue. If we run into a situation where price touches the upper Bollinger Band and RSI is above 70 (possibly approaching 80) we have an indication that the trend may reverse itself and move downward. On the other hand, if price touches the lower Bollinger Band and RSI is below 30 (possibly approaching 20) we have an indication that the trend may reverse itself and move upward. Above, I have talked about the use of a second indicator to work with Bollinger Bands. Avoid the trap of using several different indicators all working off the same input data. If you're using RSI with the Bollinger Bands, don't use MACD too. They both rely on the same inputs. You might consider using On Balance Volume, or Money Flow. RSI, On Balance Volume, and Money Flow, rely on different inputs. They measure different things. They can be used together as further confirmation of a trend. The technical term for this is 'Avoiding Multicolinearity'.