Last Friday I closed my latest Clorox Stock trade based on using the Bollinger Bands Strategy. Bollinger Bands were invented by John Bollinger to measure and apply volatility for trading and profiting from a stock, either up or down. I use the Bollinger Bands Strategy on the large cap stocks in my portfolio to boost the earnings from Put Selling. This combining of Put Selling with the Bollinger Bands Strategy can often lead to explosive returns. Since commencing my Put Selling with Clorox Stock in 2009, I had earned $20744 to the end of 2011. This year once I combined the Bollinger Bands Strategy my earning jumped by $10238 in just one year for a 49% increase in profits.
The Bollinger Bands Strategy is simple enough that any investor can learn it and it is easy enough to implement against most stocks.
Understanding The Bollinger Bands Strategy
The Bollinger Band is probably the most popular volatility technical tool in use today. Bollinger Bands plot a simple 20 day moving average of the closing price with three bands. An Upper Bollinger Band, Lower Bollinger Band and Middle Bollinger Band. These bands capture 95% of a stock’s move. They can be used in stocks, ETFs, currencies, commodities and probably just about any other trading product.
Use Of The Bollinger Bands Strategy
I use the Bollinger Bands Strategy to compliment my naked Put Selling at various times during the year. This strategy can be used to time Put Selling, option buying as well as stock purchases and selling. The Bollinger Bands Strategy I use is designed to assist my Put Selling earnings. My Bollinger Bands Strategy keeps me away from junior and speculative stocks as it allows me to continue to grow my income through large cap stocks even when put premiums are poorer and volatility is decreased.