Balaji As a trader,speculator and Investor- Balaji have more than a decade of experience trading commodities, stocks and Fixed income securities including as a senior trader with Vexes capital.He also mentors or teaches investors, traders about Financial markets and provide professional training for individuals combining Institutional experience with a technical grasp of seizing market opportunity. Since leaving the Vexes capital and Newyork city,Balaji has been working as Trading coach along with presenting seminars and writing for a number of publications.

Trading the Volatile Markets with this simple technical strategy.

1 min read

If you are a regular reader of my articles, then you know “I hate technical indicators”. They are a derivative of price action, nothing more than a mathematical complex paralysis. My clients frequently question me-“Hey do you use any indicator”? Most probably my reply will be no-because majority of you guys know, I am a pure Price action trader!

But certain time, I feel that there is some credit to the conventional methods and Indicators. I use some with clear statistical evidence. One of them is Bollinger band; hopefully this article will shed some light into a strategy that, I use during distressed periods and random markets

 
What is this strategy? Is it profitable?
First of all, Indicators based trading is not a holy grail. So I kindly advise using below mentioned strategy at your own application and terms.Most important thing is, I use this strategy only when the market is more random and choppy, these are the times when indicators from momentum, Trend following categories fails brashly.

This system is quite easy to follow and initiating trades solely based on this system is not recommended. I add some tit bits of price action along with this system, while trading in volatile random markets.

System description:
Markets= Commodities, Stocks, Futures, currencies anything!
Timeframe: Intraday, Daily and weekly chart timeframes
Tools: Bollinger bands and some clear eyes to watch price spikes!!
Strategy Name: Bollinger AB- spike

Entry and exit Rules:
Consider the Market Trend and plot the Bollinger band with default setting (20, 2)
Watch for strong spikes either on the top of the band or at the bottom depending on market direction
Enter the trades on the top or bottom of spike after close
Take profit at the counter band depending on the direction

“Beautiful Picture speaks thousand words”
tf1

Bearish Case
tf2

Advantages:
Easy to follow
Very Powerful trading system
Comes along with proper Target levels
Profitable strategy when combined with strict risk management

Disadvantages:
Very rare setup
Commonly found on Volatile markets and absent in common times

These are the advantages and disadvantages of this system. I am using this since last couple of years well to be honest it has a good success ratio, but you have to wait till the setup becomes visible.

How to know more?
If you have any queries about this strategy please leave a comment below, I will be happy to help.

Balaji As a trader,speculator and Investor- Balaji have more than a decade of experience trading commodities, stocks and Fixed income securities including as a senior trader with Vexes capital.He also mentors or teaches investors, traders about Financial markets and provide professional training for individuals combining Institutional experience with a technical grasp of seizing market opportunity. Since leaving the Vexes capital and Newyork city,Balaji has been working as Trading coach along with presenting seminars and writing for a number of publications.

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3 Replies to “Trading the Volatile Markets with this simple technical strategy.”

  1. Hi sir its good logic to follow this its really usefull for small traders i read your artical very nice i am interested to learn how to trade please let me know where when and what charges are ther regard vimal kanooga chennai

  2. Hello Sir,
    I went through your Post for EOD position. I observe that U are calculating the Position of BANKNIFTY(spot) or NIFTY (spot), so I have following questions:-

    a) then how to take position in BANKNIFTY(future) or NIFTY (future)?
    b) Does this rule apply to all scripts?
    c) Does this Bollingar Band AFL belongs to AMIBROKER? May please share the codes?

    Thanks.

  3. How many times has the setup appeared in say 1 year timeframe for stock/Index u trade. What is the success ratio in % you are able to get through it ?

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