Bollinger Bands® Message Board

[lammergriffin@hotmail.com]

Are you familiar with the inception of the bands called the double bottom or the double top? A price penetrates below the lower band (past 0.0) and remains there, but rests above the lower band, said to signify a signal for a long position. This long position is confirmed by reaching the 20-period mean, or 20-period middle band. Conversely, when a price penetrates above the upper band (past 1.0) and the second price attempt or bar fails to breakthrough the upper band, the price is said to remain below the band. The signal for a short position is confirmed when it falls down reaching the 20-period mean moving average.

I'm not sure what is meant by the double bottom and double top where the second low at the lower band, or second high at the upper band, has to remain above either band before entering a position. The double touch seems to signify a reversal trend more so than a observed trend direction where walking the bands keeps in line with %b.

[bbands@bollingerbands.com]

In my work a double bottom is a low made outside the lower band followed by a subsequent low made inside the lower bands, often a new absolute low in price, but not a new low relative to the Bollinger Bands.

I think that you are referring to two-day reversals at the bands, where you have a close outside the bands followed the next period by a close inside the bands. I’ve found that these signals are more efficient when accompanied by non-confirmation from a volume indicator like Intraday Intensity or Accumulation Distribution. In that context, we use a Sign of Strength or a Sign of Weakness for entry confirmation.

Best,

John Bollinger