Bollinger Bands: defining the Stop

Author: eMoe

This strategy opens a position in the middle of an uptrend/downtrend, after forming a hollow/peak. The main distinctive feature of this strategy is that it uses the Bollinger Bands value to define the Stop for the opened position: it measures the distance between a Bollinger Band, and the peak/hollow, and this distance becomes the stop distance. The picture illustrates how this is handled for the Sell position, although for Buy positions the logic is identical.