Queries regarding price action trading

Newton - Price Action Trading
1

there is a post published on unofficed.

i have some queries regarding that post, specifically this chart
http://prntscr.com/nqk99w
the highlighted part is bollinger bands?? and if yes how is it helping in decision making for options in regards with The Price Action Trading Strategy.

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2

The question is “How is Bollinger Band is helping in Options Trading”

See -

Bollinger Band is not the property of a stock, commodity or some other instrument. It is property of the price. The Bollinger Bands we use, uses last 20 candles in the time frame in which we are dealing with.

Theory of probability distribution says there is 99.7% chance of reversal where there is a breach of Bollinger Band of 3 Standard deviation.

We can use that as a metric of our scanner.
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Whenever option prices of 30800PE (low of the candle in the said time frame) breaches (closes above) 3SD Bollinger band; We need to look for trading opportunities.

Here the opportunity being looking for short because of probability.

  1. You can test on any options strike price.
  2. The strike price has to be liquid. (Previously last n candles has to be liquid where n should be a considerate big number.)
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