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BBS Band Break System
Automated Trading Expert
by Sylvain Vervoort
http://stocata.org/
About Sylvain Vervoort • Telecom (ITT) installation, engineering and
international sales technical support. • Engineering and product management in
security (Cerberus/Siemens) • Investment & Credit Advisor Training • Retired at the age of 60. • Hobbies: Computer hardware and software • And technical analysis of the stock market.
More About Me • Writing articles for “Technical Analysis
of Stocks & Commodities” magazine. • “Winner” 2010 and 2011 “readers’ Choice
Award”. • Book “Capturing Profit with Technical
Analysis” published by MarketPlace Books. • “AXIOM Business Book Award” 2010 bronze
medal in the category investing.
LIABILITY Trading financial products involves risk. The information contained in this presentation is not comprehensive. Despite all efforts, it may not be accurate, up to date or applicable to the circumstances of any particular case. We can not accept any liability for any inaccuracies or omissions in this manual and any decisions you make based on information contained in this presentation are your sole responsibility. The publisher and author do not accept liability for any direct, indirect, special, consequential or other losses or damages of whatsoever kind arising out of access to, or the use of this presentation or any information contained in it. Risk Disclosure CFTC RULE 4.41 Hypothetical or simulated performance results have certain inherent limitations unlike actual performance record: simulated results do no not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or overcompensated of the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No presentation is being made that any account will or is likely to achieve profits or losses similar to those predicted or shown.
CHARTS & FORMULA LANGUAGE
MetaStock® charts and used formula language courtesy of Equis International. MetaTrader4 charts and formula language courtesy of MetaQuotes Software Corp. Clip art courtesy of
PRESENTATION ORGANIZATION Presenting you BBS or my trend following “Band Break System” expert we will have a look at the following items:
Introduction Bollinger Bands Break indicator BBS Basic chart, Rules and Results BBS and forex BBS Extended tools & Chart template SRSI - Stochastic RSI indicator SSIFT – Smoothed Stochastic Invers Fisher Transform Trading Techniques & Trend Reversal Rules Trading Examples BBS Risk & Money management BBS Stock Selection
INTRODUCTION
Fundamental Analysis
INTRODUCTION
Fundamental Analysis Technical Analysis Trading Robot Stock Selection
INTRODUCTION
Fundamental Analysis Technical Analysis Trading Robot Stock Selection Money management Chart Template BBS for MetaStock, MetaTrader4, (NinjaTrader)
SYSTEM OVERVIEW
Bollinger bands
SYSTEM OVERVIEW
Bollinger bands Trading Simulation
SYSTEM OVERVIEW
Bollinger bands Broker Testing Options
SYSTEM OVERVIEW
Bollinger bands Trade Execution Testing Options
SYSTEM OVERVIEW
Bollinger bands System Tester Code OPEN LONG / CLOSE SHORT: MovingAverage:=opt1; Deviation:=opt2; Buy:= Close > BBandTop(Close,MovingAverage,Simple,Deviation); Sell:=Close < BBandBot(Close,MovingAverage,Simple,Deviation); Result:=If(Buy,1,If(Sell,-1,0)); Result:=If(Result=0,ValueWhen(1,Result<>0,Result),Result); Result
SYSTEM OVERVIEW
Bollinger bands System Tester Code CLOSE LONG / OPEN SHORT: MovingAverage:=opt1; Deviation:=opt2; Buy:= Close > BBandTop(Close,MovingAverage,Simple,Deviation); Sell:=Close < BBandBot(Close,MovingAverage,Simple,Deviation); Result:=If(Buy,1,If(Sell,-1,0)); Result:=If(Result=0,ValueWhen(1,Result<>0,Result),Result); Result=-1
102% profit with 33 trades/stock
195% profit with 68 trades/stock
An Uptrend is not a straight line
SYSTEM OVERVIEW
Bollinger bands System Tester Code OPEN SHORT: MovingAverage:=opt1; Deviation:=opt2; Buy:= Close > BBandTop(Close,MovingAverage,Simple,Deviation); Sell:=Close < BBandBot(Close,MovingAverage,Simple,Deviation); Result:=If(Buy,1,If(Sell,-1,0)); Result:=If(Result=0,ValueWhen(1,Result<>0,Result),Result); Result=-1 AND Close < mov(Close,165,Simple)
315% profit with 51 trades/stock
SVE_BOLLINGER_BREAK INDICATOR
SVE_BOLLINGER_BREAK INDICATOR
SYSTEM OVERVIEW
Bollinger Break Indicator {SVE_Bollinger_Break – Sylvain Vervoort} MovingAverage:= Input("Moving Average :",1,100,15); Deviation:= Input("Deviation :",0.1,5,1.4); LongTermAverage:= Input("Long Term Average :",1,300,165); Buy:= CLOSE > BBandTop(CLOSE,MovingAverage,SIMPLE,Deviation); Sell:= CLOSE < BBandBot(CLOSE,MovingAverage,SIMPLE,Deviation); Result:= If(Buy=1,1,If(Sell=1,0,PREV)); LTBuy:= C>=Mov(CLOSE,LongTermAverage,SIMPLE); LTSell:= C<Mov(CLOSE,LongTermAverage,SIMPLE); LTResult:= If(Result=1 AND LTBuy=1,1,If(Result=0 AND LTSell=1,0,PREV)); Final:= If(Result=1,1,If(Result=0 AND LTResult=1,0,If(Result=0 AND LTResult=0,-1,PREV))); -1; 0; 1; Final
BBS BASIC SYSTEM
Basics Trend following system Room for Reaction Longer term up/down moves Trading short with longer term
downtrend only Different time frames possible
BBS BASIC SYSTEM
Basic chart Trading Long
BBS BASIC SYSTEM
Basic chart Trading Long BBS Defaults
BBS BASIC SYSTEM
Basic chart Trading Long BBS Defaults Trading Short
BBS Back Test Results Trading Daily Bars
BBS BACK TEST RESULTS
350% profit with 44 trades/stock
BBS BACK TEST
RESULTS
18% Compounded
interest per year.
MORE PROFIT?
732% Profit
BBS AND FOREX
Trading EUR.USD 15 Min. bars
Profitable with 15 Min and 60 Min EUR.USD pair. Adapt settings to the data feed of your broker Adapt to demo or live account
BBS TRADING EUR.USD 15 MIN.
BBS TRADING EUR.USD 15 MIN.
BBS TRADING EUR.USD 15 MIN.
BBS TRADING EUR.USD 15 MIN.
Equity Evolution
BBS TRADING EUR.USD 15 MIN.
BBS TRADING EUR.USD 15 MIN.
More Risk, more profit?
BBS TRADING EUR.USD 15 MIN.
Extreme Risk, extreme profit?
BBS EXTENDED TOOLS
BBS indicators BBS is NOT perfect Opportunity to make more profit Always synchronize with BBS Short term indicator Medium term indicator
BBS EXTENDED TOOLS
Stochastic Formula Current price in relation with a previous
price range (sum( C - llv(L, 5), 3) /
sum(hhv(H, 5) - llv(L, 5), 3)) * 100
BBS EXTENDED TOOLS
SRSI Stochastic RSI
Compares magnitude of gains vs losses RSI = 100 - 100/(1 + RS)
SVE_Stoch_RSI or SRSI
BBS EXTENDED TOOLS
SRSI Formula
period:= Input("RSI period :",2,100,21); lb:= Input("Look back period :",2,100,10); summing := Input("Summing :",1,50,8); StochRSI:=(Sum(RSI(period) - LLV(RSI(period),lb),summing) / Sum(HHV(RSI(period),lb) – LLV(RSI(period),lb),summing)) * 100; 10; 50; 90; StochRSI
SRSI
The Stochastic RSI oscillator accurately marks short term tops and bottoms
PRICE STOCHASTIC
Here we add a standard 30 period price stochastic oscillator, with a K-factor slowing value of 5
Next I am adding a Smoothed Stochastic Inverse Fisher Transform or SSIFT
SSIFT SMOOTHED STOCHASTIC INVERSE FISHER TRANSFORM
You can adapt to a fast indicator as in the previous chart or a slower one like in this chart.
SSIFT
The BBS band and Long Term average. Commonly used 50, 100 and 200 day averages, SRSI, SSIFT and BBS indicator. The complete BBS Template!
BBS TEMPLATE
TRADING TECHNIQUES
Trading Long and Short Spreading the risk Compounding profits Risk and Money management
TRADING TECHNIQUES
Trading Long and Short Spreading the risk Compounding profits Risk and Money management Use a Professional reliable online broker Use a margin account Use Technical Analysis Techniques
TRADING TECHNIQUES
Trading Long and Short Spreading the risk Compounding profits Risk and Money management Use a Professional reliable online broker Use a margin account Use Technical Analysis Techniques Back Test your trading method
TECHNICAL ANALYSIS TREND REVERSAL RULES
Opening a long position
TECHNICAL ANALYSIS TREND REVERSAL RULES
Opening a long position Closing a long position
TECHNICAL ANALYSIS TREND REVERSAL RULES
Opening a long position Closing a long position Opening a short position
TECHNICAL ANALYSIS TREND REVERSAL RULES
Opening a long position Closing a long position Opening a short position Closing a short position
BBS TRADING EXAMPLES
OPENING EARLY SHORT POSITION?
BBS TRADING EXAMPLES
Long term Elliott wave count completed?
EARLY SHORT POSITION
EARLY SHORT POSITION
CLOSING SHORT POSITION
SKIP A TRADE?
NEW SHORT SIGNAL
Short With Buyback Limit Price.
SHORT POSITION CLOSED
Early Long Position
PRICE/TIME TARGET REACHED
Early Profit
Early Short with Buyback
BUYBACK PRICE REACHED
Wait and See
New Early Short?
Close short early?
TREND LINE SUPPORT AND RESISTANCE
Breaking a Trend, Support, or resistance Line
BREAKING DOWNTREND/UPTREND LINE
TREND LINE SUPPORT AND RESISTANCE
Up Or Down?
TREND LINE SUPPORT AND RESISTANCE
DOWN!
RISK MANAGEMENT
BBS Closing Signals
& Emergency Stop
MONEY MANAGEMENT
Limited number of Stocks Capital evenly divided between selected stocks No Profit or Loss sharing Limited loss if one stock fails completely Profitable stocks create maximum profit Poorly performing stocks have limited influece Spread the capital between sufficient number of
stocks
BBS STOCK SELECTION
Stocks with larger moves Manually select stocks If too many stocks found, use this formula:
(High-Low)/(Low+(High-Low)/2)*100; 2.5; 5; 10;
Filter Stocks
Look at Long term
Daily Volatility
Avoid Long term flat price move
Avoid Extreme moves in short time
periods
Avoid nice moves but with not enough
price change
Avoid large differences in volatility
(not enough volume)
Avoid too much extreme volatility days
A Good Long Term Example
Short Term Sample
IMPORTANT NOTICE
BBS Formulas will be in a separate confidential document
BBS is licensed, NOT sold Professional, commercial use requires contract
http://stocata.org/