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Bollinger Bands for Beginners: What They Really Tell You — The Bollinger Bands Strategy, Tested Against 22 Million Days of Market Data - Couverture souple

Livre 9 sur 10: The Technical Indicator Series

Cross, Dean

 
9798174053946: Bollinger Bands for Beginners: What They Really Tell You — The Bollinger Bands Strategy, Tested Against 22 Million Days of Market Data

Synopsis

The number everyone quotes is wrong, and it costs money.

You have read the sentence: the bands sit two standard deviations from the average, which captures about 95% of price action. It is in the tooltip that pops up when you switch the indicator on.

The real figure is 88.4%.

That is not a rounding quarrel. At 95%, price would close outside the bands about one day in twenty — once a month, rare enough to be worth acting on. At 88.4% it happens about one day in nine. Two or three times a month. That is not an event. That is a Tuesday.

Measured, not repeated.

Every figure in this book was computed from daily prices for 8,929 US-listed stocks and funds, every trading day from 2010 through 2026 — about 22.8 million days of prices. Nothing sampled, nothing left out. The methods and definitions are printed in an appendix, so you can reproduce any number here or catch an error in it.

What you will be able to do

Look at a chart with bands on it and answer a question most traders never ask: how far is this stock likely to travel over the next month? Not which way — the bands have nothing to say about direction, and a whole chapter proves it. How far.

That turns out to be the more useful question, and it has a genuinely good answer. It is the number that decides how many shares you buy and where a sensible stop sits. On $500 of risk and a $100 stock, the calmest tenth of a stock's own year supports 92 shares; the jumpiest supports 65. Same price, same money at risk, different size — and you will be able to work out which.

What you will stop doing

Fading band touches, which loses money. Buying them, which loses money in the opposite direction. Acting on the first day of a touch, when half of them are over by the next close. Sizing up into a long quiet stretch because a big move must be coming — folklore this book tests across 330,000 quiet stretches and finds no relationship at all. Reading a squeeze as a direction call, when 199,097 breakouts went on to resolve the expected way 49.7% of the time.

Not losing money on those habits is worth as much as any signal, and it is a good deal easier to arrange.

What is not in here

No entry signal. No stop-loss formula. No target. No win rate. They are not withheld to sell you something later — they were looked for across sixteen years of prices and nearly nine thousand companies, and they are not there. What you get instead is a way of sizing a position by measurement, a short list of things not to do, and one page of procedure at the back with every line traced to a chapter and a number.

The bands were never a compass. They are a ruler. Used as a ruler, they are one of the better instruments on your screen.

Les informations fournies dans la section « Synopsis » peuvent faire référence à une autre édition de ce titre.