An American Bollinger Band™ Breakout Strategy

Dec. 11, 2023

Last week we looked at some “Australian” Bollinger Band™ breakout strategies.

And by Australian, I mean strategies I presented in Australia.

But we don’t have to go all the way Down Under to trade a Band methodology.

We have them in America, too.

And here’s one for Futures.

Much has been said about how U.S. indexes are reverting-to-the-mean in nature. And that’s true in some cases.

But U.S. indexes are also good for breakout strategies. To prove it, we’ll use one of our favorite indicators to trigger our breakouts.

Here are the details:

Mini Dow Jones (@YM.D) 30-Minute Bollinger Band™ Breakouts

• Long Only Entry: When price closes above the Upper Band (length 20, st dev 2.2/-2.2)
• Target: $900 per contract
• Stop: $800 per contract

That’s it.

Does it seem too simple to work?

Here are some recent trades in late 2023:

The Dow has been going crazy lately. Here’s the Report trading 1 contract each time:

And here’s the Curve:

It seems like this strategy is too simple to work and it’s the wrong sort of strategy on an index.

But the numbers are excellent nonetheless.

Apparently the E Mini Dow is disobedient.

Is this just an anomaly?

We’ll take a look at another index in our next Newsletter.

Talk to you soon.

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Disclaimer:
It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these sites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, the publisher, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.

HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER- OR OVER-COMPENSATED FOR 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 REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.