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Equity curve timing with Bollinger Bands

June 25, 2019


“Once a year…”

Many traders ask me when it’s better to start trading a system, or when may they start trading Nightly Patterns.

That’s a very hard question. I feel good when we are earning and winning like everybody else in the world. Anyway, when the equity curve of a system makes new highs it’s not the best time to start or increasing equity exposure.

The best time to start trading a strategy is at its drawdown bottom. But how can we fix it?

I tried moving averages, linear regression, and Bollinger Bands. Bollinger Bands looks to be the most effective on timing Nightly Patterns equity curve. I went back to Nightly Patterns inception in October 2012. We trade ES future,  but I considered SPY in this backtest because I use it for searching new patterns and getting trade signals (that’s why it’s only 37% cumulative return since 2012 in the chart).

Here’s the legend of the chart above:

  • Blue line – Cumulative SPY Nightly Patterns % returns equity curve
  • Yellow line – 20 SMA of the Blue line
  • Green line – 3 standard deviations above band
  • Red line – 3 standard deviations below band

Well, I highlighted with a grey circle the 5 times Nightly Patterns equity curve have touched the red Bollinger Band.

Now we are right in the 5th time, so if you are waiting outside the lines, now it’s a great time to start! (or to add equity exposure…) This is a “once a year” big chance!

Marco Simioni

Nightly Patterns

From → Uncategorized

  1. Alex Argyros permalink

    Thanks, Marco, for the interesting analysis.


  2. It should be help us in future to know when it’s time to increase the number of futures contracts traded…


  3. nayan savla permalink

    hi where can i see an updated chart? if there isn’t one i feel it would be of a lot of interest to all the public…thanks


    • Hello, well you can download the updated chart in the “trading result” page. It’s an excel sheet where you can see the updated chart. We make 1.5 trades per week on average, so it takes time to see big changes.


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