Hey hey: what's up my friends, so in today's training i want to share with you a simple bollinger band trading system that has generated 1 689 over the last 22 years, and the best thing about this system is that you don't need any complicated chart software or Indicator because the bollinger band indicator is actually available in almost all charting platforms out there. So are you ready to get started if so hit the subscribe button right now and then let's get started so first and foremost right. What is this trading system about and why does it work? So this trading system right looks to trade, the u.s stock markets right it looks to identify stocks which are in an uptrend right, because these are stocks likely to continue higher. Why are stocks that are in an uptrend likely to continue higher chances? Are these stocks are well-run companies? They have consistent earnings.

That's why the the trend is, you know uh towards the upside right, and these are things that don't really change overnight. You know like, like you know, like next day, bum right, that's the your earnings. Suddenly change! Does the company suddenly the the management become bad guys, not really it takes time for such changes to evolve. So this is why stocks in an uptrend they are likely to continue higher and we want to focus on such stocks.

Second thing is this right: just because a stock is in an uptrend doesn't mean that it goes up in one straight line. There are, you know, pullback along the way, so there are times when sellers actually push the price of these stocks right below the mean right, which actually leads to profitable trading opportunities, and this is where this trading system comes into play. To identify when the stock price is kind of like undervalued, so we can buy right and capture. You know uh profits right as it continues up higher.

So let me just give you uh this trading rules right this specific trading system right that you can use to trade, the stock markets, so we'll be trading the u.s stock market, specifically stocks in the russell 1000. These are the thousand largest stocks right in the u.s stock market. Next thing is this: how do we define the trend, so we can define the trend right. We are wanting to look for stocks right above the 200-day moving average, because if the stock is above, the 200-day moving average chances are it's in an uptrend.

So that's how we define the trend next one? How do you define the pullback? So this is where the bollinger band comes into play: we're actually looking right for the stock to to close right below the lower bollinger band. So if you know bollinger band, it looks like this all right i'll share with you. Some chart examples later. So the price of the stock goes up comes down.

We are looking for it to close right here below the bollinger band, so this is the bollinger band right, we're looking for it to close below the bollinger band and the bollinger band settings that we are using is a 20 period bollinger band 20 day 20 day Settings and 2.5 standard deviation, so the standard bollinger band is a 20 day 20 period and two standard deviation. We have extend. The standard deviation, deviation a little bit right to look for the additional stretch right, additional pullback down lower. So there's a good chance.

It can you know snap back up higher, so it's kind of like you know, uh a rubber band right where it's being pulled right, the the harder you pull it right, there's a greater chance that rubberband will actually have a stronger snapback. So this is what we are doing over here. We are looking for a 2.5 standard deviation right for our bollinger band and again i'll share with you on the charts later how that looks like so this is how we define the pullback and then entry we, if that happens, we are looking to place a three Percent buy limit order below the previous day closing price. So once the the let's say this is the bollinger band.

Okay, let's say a stock up down up down. It closes below the bollinger band over here, okay closes below it, so it doesn't mean that we hit the buy button just yet. No, we will place right. A three percent buy limit order, order below the previous day closing price.

So let's say this closing price is that let's say it's: 100? Okay, what we'll do is we'll place a buy limit order at ninety seven dollars. Why ninety seven dollars - because this is a three percent uh lower than this hundred dollar closing price. So, let's say price close over here: 100: the next day we place a buy limit order at let's say over here: 97. Okay, and if we get filled right, then we are in the trade.

So this is what i mean by you know: place a three percent: buy limit order below the previous day, closing price and then finally, for exit right, we exit when the two period rsi crosses above 50 or after 10 trading days. So all in all right. This uh, this trading setup looks like this. Let me just walk you through right.

We are looking for stocks which are in an uptrend. I mentioned this a few times already in an uptrend. Okay, then, when it makes a pullback right. This is where we're looking for buying opportunities, so when he makes a pullback you overlay with the bollinger band, you look something like this.

Okay and the stock has closed below the lower bollinger band over here. So once that happened, we have placed a three percent buy limit order. So next day, when the market open, we place a buy limit order, let's say three percent below the closing price. So if the next day the stock continues down lower, it hits our buy limit order.

We are long and then we will sell right when the stock makes a rarely up higher. So we are looking to capture that one move right in this stock. So let me walk you through a few examples, so you can see how this uh trading system works. Let me just get my charts.

Okay, so you see over here i'll just walk you through the the indicators and whatnot so over here you can see that this is the 200-day moving average over here. Okay, then this is the bollinger band. So i'll just walk you through the settings of the bollinger band. So if you look at the bollinger band, you go trading view.

Look for bollinger band. This will appear. This is the length i'm using 20 standard deviation, i'm using 2.5 so default. This one is actually two, but i'm looking for 2 4.5 to to define the the additional stretch.

So if i change this change this to two right, you can see the bollinger band will shrink they shrink slightly. So i want it to uh. Look for the additional stretch, so i go with a 2.5 standard deviation. Okay! Now, where is the setup for this particular chart? So i'm just going to walk you through over here.

You see, okay, i'm going to zoom in so we can see better. So you can see that the rules right are met so far the as of right. Now the price is above the 200-day moving average. That's one number two: the stock price has to close below the lower bollinger band.

So in this case, you can see this stock price, it has closed below the lower bollinger band and it's not just a normal bollinger band. It's a 2.5 standard deviation right, the the upper and lower boundary, so it has closed below it. We have the second criteria. Third thing is that we will place a three percent buy limit order below the previous day, closing price.

So what we'll do is we'll you can find out what is the closing price of this candle here? The closing price is about four to eight point: seven, seven. So i'm just listing down the closing price over here. Four to eight point: seven: seven: what we're gon na do is that when the market is closed, the next day we're gon na place a three percent buy limit order. So just take a calculator over here.

I've got this trusty calculator here, type four to eight point: 8.77 multiply by 0.97. Okay! So just multiply this by 0.97, so you will get a figure right of about 415.9. So, the next day, when the market open or before the market open, you will place a buy limit order at 415.9 for this particular stock. Okay.

So if i just look at it next day, when the market open, you see this green candle over here, will you get filled or not? It depends whether the stock right has trade low enough right to hit your buy limit order. So in this case you see the low of this stock price right, the low is actually 413 and that clearly right would have hit our buy limit order. So now, let's imagine we are in the trade. When do we exit the trade? So if you remember, we exit the trade when the two period rsi crosses above 50 or after 10 trading days, so in this case i'm going to pull out the two period rsi just look at over here.

This is two period rsi then uh and you just click. Okay, so your rsi. They have a lot of there's other features, but it's not needed just show the rsi is enough. You don't need all the other features.

Okay, just two period rsi and then you click. Okay, so as of right now, you can see that the rsi value is three. How do you know that raider well, because it says so over here, so what we're looking for is for the two period rsi to cross above 50.. So, let's look at what happens? The next day next day is 3.19.

At this point, the rsi is 43. You can see over here, okay and then finally, let's see what happens next. Rsi is now 75.. So at this point the rsi value is above 50 because it's 75 over here.

So this is where we exit this trade. So again, we exit this trade at the next day, open when the market open the next day we exit the trade, so the market open up in our favor over here at this point the next day get up slightly and we exit this trade for a profit. Does it make sense? Okay? So let's have one more example right, so you kind of understand this trading system. Another one is this odfl? Okay? So let's have a look at this one over here.

So again, this setup is at this point: you can see, walk you through the setup number one. The stock has to be above the 200-day moving average, so over here, stock is above the 200-day moving average grade. So we're looking at this candle, specifically okay, remove the rsi first second thing: we need the stock right to be to close right below the lower bollinger band. So in this case you can see this one over here.

It has also closed below this lower bollinger band. Okay and our bollinger bands set things right just to do a quick recap: it's a 20 period and 2.5 standard deviation. Okay, let's close below it third thing: we need to place a buy limit order 3 below the previous day, closing price. So in this case, the closing price is about 340 and 62 cents, so i'll just put 340 dots, okay, we're going to multiply by 0.97, so we can get uh the figure right to place our buy limit order at so you just take 340.62 multiplied by 0.97.

You get 330 and 40 cents, okay, 30 dollars and 40 cents. So what you're gon na do is then, the next day when the market opens, i think, even before the market open, you can place a buy limit order at 330.4. Okay. So, in this case, let's see if we get filled or not so the next day, you can see clearly right.

You will get filled because this stock right get down lower and you know make such a low spike down lower. So you will definitely get failed on this. This particular trade over here. In fact, our by limit order is around 330 and 40 cent, which is actually over here right.

You can see over here right. You would have gotten filled at this point near the lows of this candle day, so next thing once you're in the trade. What's next, you are using the rsi indicator to help you exit your trade, so we are using the two period rsi to cross above 50.. So, let's wait for it to cross above 50..

So again, the next day the rsi value is 46, not yet next day 69. So at this point, rsi has now crossed above 50 or, as you can see over here now, 669.. So what you'll do? Is it? Don't have that dirty thought all right, so what you're going to do now is uh next day you will exit the trade at a market open right. Why can't you exit at a close reason being is that you have no idea how what rsi value will be right until the market has closed right.

So the the earliest point that you can exit the trade is the next day open right. So the next day, market uh open up slightly higher and you exit this trade for a profit. Now, if you recall right uh this, this trading system doesn't really have like your traditional stock loss, like let's say, a trillion dollars or 250 dollars. Instead, what it does is that if, let's say the stock continues to go against you right, we have our time stop.

So we will hold this trade for a maximum of 10 days. So it's whichever happens. It's either the two period rsi crosses above 51st or the stock right uh has been obviously, or rather you hold the stock at a maximum of 10 days, because sometimes the two-period rsi it may not cross above 50.. It just keeps going down down down day after day, and eventually you have to kind of cut that loss, so the maximum kind of pain your endure is after 10 trading days.

So you give it 10 trading days if, after 10 trading days, the stock still has not uh, the rsi has still not crossed above 50. You will manually exit the trade, so you have another time based stop loss to kind of like contain the damage. If the stock price keeps going down lower and lower okay, so that's a time-based stop-loss right for this particular trading system. Now, at this point, some of you might be thinking, but right now, you're just sharing these are all cherry.

Pick charts and i mean right. These are all cherry pick, charts right so to kind of prove to you whether this trading system works or not. We can run a back test right and let me show you the results. So here's the back tested results over here now and by the way, if you're, enjoying this training so far smash the thumbs up button.

If not then hit subscribe. Okay! So now here's the back test results over the last 22 years right from 2000. All the way to 2021, you can see that uh 2000 - it's up. 117 percent 2021 - is up 20, 20, 20 up 18 right so over here, the the total net profit.

So far, over the last 22 years, as mentioned 1 689, a your winning rate is about 68 losing rate about 31. Okay, you can see that this is how the equity curve looks like right over the last 22 years. So this trading system clearly is a profitable trading system and it still works even to today. So so here it is right, numbers right numbers, don't don't uh.

I mean, i want to say, numbers don't lie, but actually sometimes numbers can be manipulated to like, but this all right. What i'm saying over here is to the best of my ability and i believe, right there. This is a trading system that works and continues to work even to do to today. Okay, so with that said, if you want to learn more about, you know systematic trading, how you can you know trade, the markets in such a you know systematic matter.

Without you know, uh spending too much time analyzing the charts. Then i got this free event coming up. It's called our stock trading secrets. You can put the link somewhere below this video.

You can sign up for it. So in this webinar right, it's a live. Training you'll learn a simple stock trading system that has generated over two thousand four hundred percent over the last 20 plus years. We'll i'll share with you how you can actually grow your account to seven figures and beyond.

Even you have a small starting capital how to actually generate consistent profits from the markets. You know, regardless of whether it goes up or goes down or even during a recession, okay and much more. So this is a live webinar i'll put the link somewhere below you. Can sign up for it next one is in march, but if you watch this video and it's really much april, i mean don't worry because we'll put the latest uh date right over here right, even if you miss it in much.

Maybe next one is in april, may you'll sign up for it and we'll you know, put you on the waiting list for it so with that's it. I wish you good luck, good trading, and i will talk to you soon and by the way, i'll put the link somewhere below this video. You can sign up for it. Talk to you soon.