Donchian Channel or Bollinger Bands?

[shooly76 10]

These both seem quite similar to me, however, from what I can see, the price never breaks outside of DC supp/res, but it often does w BBs. Is there more info to be gathered from BBs?

 

other than price breaking BBs supp/res, the 2 price channels seem very closely related.

 

also, I am using a trending strategy, so what is the best oscillator to use for these price envelopes to better predict a trend in price action? RSI? Price oscillator?...etc??

Edited July 25, 2011 by shooly76
changed 'indicator' to 'oscillator'

[Tams 20]

These both seem quite similar to me, however, from what I can see, the price never breaks outside of DC supp/res, but it often does w BBs. Is there more info to be gathered from BBs?

 

other than price breaking BBs supp/res, the 2 price channels seem very closely related.

 

also, I am using a trending strategy, so what is the best oscillator to use for these price envelopes to better predict a trend in price action? RSI? Price oscillator?...etc??

 

BB is based on standard deviations.

 

It shows how much variation or "dispersion" there is from the average (mean, or expected value).

 

BB works best on underlying that oscillates in a trend.

 

Standard deviation - Wikipedia, the free encyclopedia

 

if you can make sense out of these 2 pictures, BB is speaking to you.

Otherwise skip it and move on to the next indicator.

 

 

[SIUYA 11]

These both seem quite similar to me, however, from what I can see, the price never breaks outside of DC supp/res, but it often does w BBs. Is there more info to be gathered from BBs?

 

other than price breaking BBs supp/res, the 2 price channels seem very closely related.

 

also, I am using a trending strategy, so what is the best oscillator to use for these price envelopes to better predict a trend in price action? RSI? Price oscillator?...etc??

 

they are completely different.... a channel of moving averages might look related as well.

 

and off course they all are as they source the same data, but similar looking means not much. Rosanne Bar and Heidi Klum are similar looking - but what a difference a difference makes.

 

suggest you check out http://www.traderslaboratory.com/forums/trading-psychology/10158-optiontimers-project.html

for a good beginners ideas about trending strategies.

[livernik 10]

No indicator , alone, can give an answer.

Combine ( Bollinger )

with another indicator like MACD.

Believe Macd ( cross with the trigger or cross of zero line )

if and only if , some bars ago ( lets say 3 or 10 ) , price crossed out or touched the curves of Bollinger ..

[phantom 16]

Shooly,

 

I've had a lot of success with BB's. I wait for "pinch zones" prior to trading the breakouts of the bands. Then I trade breakouts of closes outside the bands.

 

If your desired market is prone to long channels within the pinch zones, move up in time frame until the pinch zones shorten.

 

An example of a great chart for clarity of pinch zone breakouts: 10 or 15 minute EC charts.

 

Check it out.

 

 

Luv,

Phantom

[Stefan 10]

Both are fine with a certain setup: (a) Review of Donchian Channels on the large portfolio; (b) Review of Bollinger Bands on the same portfolio.