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those of the magazine. —Editor
VOLATILITY IS KEY
Editor,
One of the joys of having created an
analytical approach such as Bollinger
Bands is seeing what others do with it.
Thus, it was with pleasure that I read
Stéphane Reverre’s "Are Two Channels Better Than One?" in the January
2000 issue of Technical Analysis of
STOCKS & COMMODITIES, The Traders’
Magazine. Reverre, using relatively
short and narrow Bollinger Bands,
looked at what is essentially a volatility
breakout system. This reminds me of
the late Bruce Babcock, publisher of
Commodity Consumer Traders Report, who, after exhaustive research into trading systems, concluded that his favorite
approach was the volatility breakout.
It is interesting how the same ideas
resurface again and again. I remain convinced that volatility is the central issue
in investing.Recent academic research
suggests that while price is neither cyclical nor forecastable, volatility is both.
Maybe they are on to something!
JOHN BOLLINGER, via E-mail
www.BollingerBands.com
Thanks for writing, John. —Editor