beathespread

Synopsis

This is a system created by Mark Brown.

This trading system is based on 38-bar, three-standard deviation Bollinger Bands of a 10-bar Adaptive Moving Average (AMA) of high and low prices. There is an adaptive component in the system: the Adaptive Moving Average, which was created by Perry Kaufman, automatically increases the length of the moving average as market volatility increases, and vice versa, when the volatility drops the moving average decreases.

The Trade entries are based on the idea that a move above the upper Bollinger Band is a sign of strong upside momentum, and a move below the lower band indicates the is a sign of strong downside momentum.

The entry and exit rules are straightforward: When price closes above the upper band, a long trade is entered; when it closes below the lower band, a short trade is entered.

Read the article for more details regarding the money management and position sizing.