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/

sve.vervoort@scarlet.be

THANK

YOU

http://stocata.org/ sve.vervoort@scarlet.be