We offer simple Bollinger bands forex strategy, which can give you very good results with high profit if applied correctly.
Currency: Any (prefer to EUR/USD)
Timeframe: D1 (Daily)
Indicator: Bollinger Bands
Setting: Default (Period 20, Deviations 2)
Bollinger Bands Forex Strategy:
After applying this indicator, three indication lines of the simple moving average will be shown on your trading chart. Upper line, midline, and lower line.
We open a D1 timeframe chart of the EUR / USD and apply Bollinger Bands indicator with the default setting. If we look closely at the graph we realize that the upper line of the bands acts as a resistance and the lower line as support. When the price touches the upper line, it falls down towards the lower part and from the lower line to the upper line.
Entrance to a Trade:
- The system is very simple, we must wait for the price to touch the upper line of the band and the candle closes below the upper band.
- We wait for the next candle and if it opens below the previous one, this indicates that the price is very and probably fall down to the bottom. So we should place a sales order and set stop lossless than a hundred pips.
- To enter the purchase we must wait for the price to touch the bottom and the candle closes above the lower band so we wait for the next candle to open. If it opens above the previous candle then we should place a purchase order and set your stop loss not more than a hundred pips.
Exit from a Trade:
You must wait for the market movement and set a take profit of more than 100 pips. If your profit goes more than a hundred pips, you should bring your SL at a hundred pips profit.
Make your Bollinger Bands Forex Strategy More Securable:
It is very important to use another indicator or a reversal candlestick pattern, to confirm the market signals to book your trade. It requires constant monitoring of the system. You must choose a reliable broker before starting forex trading.