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shakespeare

2,124 Posts.

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30/01/18

18:34

Post #: 30673414
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Originally posted by obladiblada01 ↑

An approach to investing that might interest you AJ is a trend following model used by some money managers based on a very simple algorithm that you can plug into any decent charting platform, and can be applied to indices, currencies and commodities, and has good returns.

The algorithm is: place a one standard deviation setting above and below a standard 200 day Bollinger band MA. Whenever price rises above the upper standard deviation band, go long. Whenever price rises or falls to be within the deviation bands, go to cash. Whenever price falls below the lower band go short. Going short is optional if you are adverse to this style.

You could use this algorithm very profitably on the SP500. Back test it. One caveat would be to go long inverse ETF's when the price falls below the band. If you are more conservative you could hold 50% cash and use short or inverse ETF's when the price falls below the deviation band.

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obla
what chart intervals are you working with in regards to your bollinger theory
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0 Great analysis

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