I have found the key to Bollinger bands is the combined use of 20 day, 50 day, and 200 day bands with 2 standard deviations. It is difficult to understand reversals when using only the traditional 20 day Bollinger. Reversals often occur when price touches or intersects the 50 day or 200 day BB. The 200 day can also determine major cycles. For example, the S&P500 began the correction of April 2010 the day after it touched its upper 200 day BB. The use of only a 20 day BB gave no clue of the top.I have found that Fibonacci ratio standard deviations of the 200 day BB are responsible for reversals not otherwise attributable to other trend lines. Try .3,.5,.618,1,1.3,1.5,1.618,2, etc. std. dev. settings on the 200 day BB.This system doesn't work every time. If it did, I would be filthy rich. But it is a much better use of Bollinger bands than the traditional 20 day BB only. Combining the 'Triple BB' system with other trend lines and indicators gives you a much better feel for market moves. After you get accustomed to three sets of Bollinger bands, your charts will seem naked without them.John Groweg
