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Strategies & Market Trends : Stochastics -- Ignore unavailable to you. Want to Upgrade?

To: jjs_ynot who wrote (506)	4/15/1998 12:27:00 PM
From: Wayners	Respond to of 927

The "bollinger bands on bollinger band width" indicators does not give any buy or sell recommendations. It gives volatility forecasts only. The indicator is used to time entries and exits better. When the lowest volatility point is reached and you can see that the bollinger band width is starting to increase--this is the best time to buy calls options if you think the stock is going up. It is also the best time to buy put options if you think the stock is going down. It is also the best time to either buy the stock or short the stock depending on the direction you think the stock is going. When volatility is peaked, it is the best time time to either write calls or to write puts. When volatility is peaked is also a good time to close long stock postions or cover short positions. In summary, low volatility transitioning to higher volatility is the time to OPEN new positions and high volatility is the best time to CLOSE existing open postions. The only positions I consider opening on peaked volatility have to be VERY VERY high volatility peaks where "bollinger band width" goes vertical rapidly and is pointy like the end of speak.