Hey hey: what's up my friends, so in today's training, i'm going to share with you a simple bollinger band, bollinger band trading system, right that has generated 327 right over the last 26 years. Okay, i'll share with you, the exact trading rules, the entries, the exits, the risk management and much more and also right. Once you've learned this system right, you can spot trading opportunities like this right where you'll be able to buy. You know strong breakouts, this green arrow here is the buy signal you buy and you can write the trend up higher and sell at this rate arrow over here.

So you can see that this is uh, allowing you to write this strong, uptrend higher and in this case it's a gain of about 120 for this particular trade. So all this and more in today's video you ready, then let's get started so first thing. First, i want to say: is that no, i didn't come up with this trading system, because i want to give credits to urban jekyll and emilio thomasini as well as nick red, because i learned this uh system right from this traders from these traders. Right so again, credits go to all of them right.

I take nothing for it right. I simply, you know, took their ideas, their system. I made some very minor tweaks and pretty much prepared this video here for you today, okay, so credits again to all this uh. These three traders, so what is this trading system and how does it work? This is actually a bollinger band, breakout trading system right.

What you're trying to do is to identify a strong breakout and then to write the trend up higher. So, for example, it's going to look something like this. Let's say the stock price it breaks out higher right, you're, looking to buy and then write the move up higher until it shows signs of weakness. At this point, you sell and you're, thereby you know allowing you to capture kind of, like you know the meat of the move, the meat of the trend.

Now, why why? Why does this trading system work? What's the logic behind it? It's very simple right! It's because strong performing stocks they are likely to continue higher. They are likely to outperform the market. Why? Because these are stocks that are usually having a strong, consistent earnings. These are stocks that have positive sentiments behind it, and these are stocks could be.

You know uh have a strong fundamentals. Yeah, you know well-run companies. So this is why strong performing stocks they are likely to outperform the market. So now you might be thinking but rain.

You know how do i identify a strong breakout, rainer but rain? How do i ride the trend up hi? How do i do it, but rain? How do i know which stocks are strong right, great question, so this is why i'm going to share with you the exact trading rules, to answer all these questions and more, let's get started so the trading rule is this number one? The russell 1000 right is above the 300-day moving average. The reason for this rule is that we want to be buying right in a bull market right. As you know, if the overall stock market is heating up higher more stocks, right will continue to go up higher. If the overall market is heading down lower in a downtrend in a recession and what not more stocks will go down lower as well, so this is why we want to make sure that we are only buying right in the bullish market conditions.

So this is why we want to make sure that the russell 1000 is above the 300-day moving average. If it's above the 300-day moving average, then we can look for buying opportunities. If it's below the 300-day moving average, then we stay in cash. We don't buy.

Okay! Next one, the entry, the stock price right, the stock price, has to close above the upper bollinger band right. So we are not using our typical. You know 20 period bollinger band over here, because those will result in a lot of false break up. We only want to identify kind of like high quality, strong breakouts, so the way we do it is that we tweak our bollinger band settings, we're using the 200 period.

Bollinger band set bollinger band settings and we're using four standard deviation. Four standard deviation away from the the mean right, so the bollinger band, the middle bollinger bands. So for those of you who are not familiar, let me just explain to you what the bollinger band looks like. It looks something like this right.

This is the upper bollinger band, we have the middle bollinger band and then we have the lower bollinger band so for this one over here, all right upper bollinger band - we're referring to this one over here. Oh this, this this line over here the upper bollinger band right. This is upper, it's called the middle and it's the lower. So we are referring to the upper bollinger band.

The stock price has to close above the upper bollinger band. The settings we are using is the 200 period and four standard deviations for the exit right. We will sell the stock right when the stock price closes below the lower bollinger band, again we're using a 200 period, bollinger band, but this time around our standard deviation we're using 0.5 standard division. Why not for standard division? Because if you were to use four right, you will give back a lot of open profits right.

So this is why we want to have a tighter trailing stop loss right, so we can still write the trend up higher but still at the same time, don't give back. You know too much open profit, so we are going with a 0.5 standard deviation. So don't worry if you don't know how to do the settings, because i'm going to share this with you right now so, for example, on trading view right, there's this bollinger band indicator just pull it out right, go to the settings the length over here. We change to 200 and the standard deviation here is four, so this one here is for the upper bollinger band settings.

This is for your entry right. So when you're looking to enter your trade, this is the settings to use now what about exit right? So exit is similar. Okay, we are looking at the lower bollinger band right and again 200 period. Moving, i mean the 200 period is the settings for the bollinger band standard deviation here is 0.5, so this is for our exit.

Okay. So when you plot this on the chart right, you will uh depending how you do your settings. You can have all three lines being shown: the upper lower and middle bollinger band or you can hide those settings for me as you'll see. I hide some of the the the line, so it doesn't confuse you and i'll share with you shortly right how it works okay, so just for now, this is the settings to use right.

If you are on trading view or on whatever charting platform that you are using, so trading rules continue right position. Size is 10. So what we mean by 10 is let's say you have 100 000 trading capital. It doesn't mean that you put all hundred thousand dollars into one stock.

No right 10 means right. We only allocate 10 of our capital to one stock, so in this case would be 10 of 100k. Is ten thousand dollars, so ten thousand dollars to one stop? Ten thousand dollars to another stock and you can see that you can buy a maximum of ten stocks, because ten thousand dollars multiplied by ten is a hundred thousand dollars, which is your initial capital. So this is what we mean by position size each stock.

We only use 10 of our capital to allocate to one stock. Next time frame is daily. We're only trading on the daily time frame right stock universe is the russell 1000 we're only trading stocks in the russell 1000 index. So this is actually the largest 1000 stocks in u.s and they are liquid right, easy to enter and exit your trades with.

You know minimal, slippages and finally ranking right. What is ranking for so sometimes right when, let's say in a bullish market condition, you might have 20 potential trading setups. But, as you know right, your position. Size will only allow you to buy 10 stocks at a maximum.

How do you, you know, choose the 10 stocks right among the 20 potential setups, so what you want to do is to rank the stocks right according to their rate of change, right you're, using the rate of change over the last 300 days right. So if you just pull out your rate of change, indicator, roc indicator right and adjust the period to 300 period 300, the settings 200 over the last 200 days, so those 20 stocks. Let's say if a potential setup right, you rank them according to their rate of change over the last 300 days, so those stocks right that has the largest rate of change value right. You will select those stocks right to trade, uh trade, all right.

So let's say you have 20 stocks right and uh. You just simply choose the top 10 stocks right that has the largest rate of change value. Those are the 10 stocks that you will buy right to trade, this particular system. So that's what we mean by the ranking.

So now let me share with you some examples of how this uh trading system looks like. So what you'll see is uh later on? The charts would be something like this. So let's say the stock price is uh. Let's say for entry goes up breaks out right, you'll notice that at this point right the buy signal right here.

It will be above this upper bollinger band line over here. So this is where the buy signal occur when it breaks and close the upper bollinger band line. This will be a buy signal so likewise right. The sell signal is very simple: when the stock price - let's say it goes down, goes up, then it starts to goes down and then it cares.

Let's say this is the low lower bollinger band it closes below it. This is where you sell right, so so i'll share with you some some charts right. So you know how this looks like so again. First one is marvel technology you can see over here.

This blue line here is the bollinger band upper bollinger band. You might be thinking but brain. You know this doesn't look like your typical bollinger band. I i get it right because a usual bollinger band has three lines: the upper bollinger band, the middle and the low.

What i've done is actually actually hidden right. The middle bollinger band and the lower bollinger band, because it's not needed right for the entry. As you know, the entry we're just simply looking for a break and close above the upper bollinger band. This is the settings of the bollinger band that we use right.

I can see it's 200 period and four standard deviation so on this candle over here, this particular candle over here notice how the price breaks and close above the upper bollinger band. That is a signal for us to buy, but but then the thing is that when the price breaks and close up when it closes above the upper bollinger band, the market is really close. How do you enter the trade you can force a trade after the market? Is close right, so this is why your your next opportunity to enter a buy trade is the following day when the market opens so d market by this green candle over here notice, how the market open over here. This is where we enter.

This is where we get long into this stock right marvel technology. Now what about exits right? So if you remember our exits right is when the bollinger band is also the 200 period bollinger band, but we are using 0.5 standard deviation for exit, so you can see 200 period 0.5 standard, deviation and notice here this red candle or in this red arrow over Here, or rather this red candle over here, this blue line is the lower bollinger band: okay, i've hidden the upper and the middle bollinger band. So i don't confuse you right, so you can see this is the blue line this on this red candle, it breaks and close below this blue light, so it means that it has break and close below the lower bollinger band. This is our exit signal, so we exit the trade.

But again if the market is closed, you can't exit the trade, so the next possible time to exit your trade is the next day open, which is the market by this rate arrow over here. The opening price is where you exit your trade for this particular trading setup. So you can see right this green arrow here was previously your entry. You bought it right, go along and exit over here right, so you write this move up higher.

I think this is a gain of about close to 70 on this. This stop next one example, two right so again to walk you through the entry, our bollinger band. We have a break and close above the upper bollinger band. This is the settings we use 200 period as well as false standard deviation for the upper bollinger band, so price breaks and close above it.

This is our of setup to go long right. So again, market is really close. When can we enter? We enter the next state open, which is over here. We enter this particular trading, uh setup, okay, so we are long exit right, so we're looking for the price to break and close below the lower bollinger band.

So this over here is the lower bollinger band settings. Is over here, 200 period and 0.5 standard deviation for the lower bond in japan notice on this candle over here the price breaks and closed below the lower bollinger band. There's a gap against us, so this one is a loss and again right. So when the price breaks and closes below the lower bollinger band, we need to exit this trade, so we exit at the next state open over here.

So in this case we bought it at this heist and then sell it at this lows. This one is a loss for this particular trade and i'm sharing with you losses, because you know this is in the holy grail right. You will have winners. You have losses along the way, so sharing losses is to manage your expectations instead of thinking all right.

Now, sharing this high win rate training system, i'm going to make a ton of money atm print money, not gon na happen, my friend, so this is why losses do not kind of bring you back to uh ground you back to reality. Yeah another example over here is uh z, scalar, again same thing, right, price, break and close above the upper bollinger band right. So we enter the next day open over here right and then we exit right when the price breaks and close below the lower bollinger band. Okay over here, so you can see the price breaks and closed below it.

We exit at the next day open over here when the price breaks and close below the lower bollinger band. So this was your entry and then this over here is your exit. So, once again, right, if you are some of you watching rainer, why is it bollinger, but only having one line, because i i've hidden right the other line so for, in this case the exit right, i've, hidden, the upper bollinger band and the lower bollinger band lines On the chart - because i don't want to confuse you further - i mean there's no need to you know, clutter the charts with so many lines. Okay.

So now what are the results of this particular trading system? So clearly, i've cherry-picked a few charts to explain to you how the system works. These are the results from 1995 to 2021.. Annual return is about 13.86 percent right, i think, beating the s p, 500 uh winning rate is about 56.31 right slightly better than you know. Uh uh tossing a coin average profit right for each trade is about 32 32.16 and your average loss for each trade is about 10.

So you can see that, from a risk to reward ratio right perspective, you can see that your winners right are usually larger than your loser, and your winning rate is just slightly better than you know. 50, i mean 56 percent. So this is why this is what we call an age right: a positive expectancy right in your trading uh system, right and in terms of drawdown right. This system - i didn't put it over here - it - has a maximum drawdown right based on this historical test of about 38, so smp 500, if you buy in 1995, hold it to 20 21.

I would say your drawdown is, like you know, 55 56, pretty deep. For this system right, your drawdown was uh 38 right during this period. So here's the sorry. This is the the results right on the monomon year on year basis.

So, for example, in 1995, you can see that this system is up 31 right 1995 january. It made 0.7 percent 1995 february. He made 0.2 percent. So that's how we interpret the table.

So what about 2008 financial crisis right this system? It's uh down! Zero point: nine percent! Alright! If i, if i didn't, if i just see this correctly yeah 2008 financial crisis, this system lost 0.9 percent, so you can see over here. What is that? 0? Zero? Zero? Zero? Zero zero! Why is that very simple because remember the trend filter we introduced if the russell 1000 is below the 300-day moving average, we move to cash. So when the market is collapsing, it's in a drawdown. You know the street is you know bleeding people are losing their pants their right.

You are in cash right, which is a good feeling. Okay. So then you can see over here at night. 20.

20 right. This system is up. 14. 20.

21. It's up about 15! This is how you, actually, you know, make sense of this uh. This table uh results and here's the equity curve right over the last 26 years, so uh up about 327 right over the last 26 years and by the way, if you've enjoyed today's training right, then you will love right. This is a free live event that i'm doing called stock trading secrets right during this live event right, you will learn a few things number one right, we'll talk about the fastest way right that you can become a profitable trader, even if you've tried everything else and Fail we'll talk about how you can actually generate consistent profits all right almost every year, even during a recession or a financial crisis, we will talk about how you can actually grow your account right to seven figures and beyond right, even if you have a small starting Capital plus all right i'll share with you a pullback trading system right that has generated right 325 right over the last 22 years right.

So all this and more during this a live web class. You can just come here and register for it. It is absolutely free. Okay, so the next one is on may, but again you might be watching this video in june july, whatever i'll try to hold this event right once a month.

So you can just come down to this page i'll, put the link somewhere this below this video. So you can see, when is the next slot available that you can join for this webinar? Okay, so i'll put a link somewhere below this video sign up for it, and with that said, i wish you good luck. Good trading! I will talk to you soon.