Low Risk Forex Strategy With Bollinger Bands And RSI Indicator
Conclusion: BB strategy which uses CCI indicator is a good combination for a solid system. The purpose of the research was to determine if the strategy that Nick mentions in the podcast has potential in other markets. Nowadays the Strategy Tester available with MetaTrader 5 seamlessly combines the right amount of optimisation and confirmation of achieved results if the strategy was put into practice.
In the above chart the bands had narrowed just after an expansionary phase, indicating the time was ripe to take advantage of a bull bounce trade in the direction of the bullish main trend. From mid January until early May, Monsanto closed below the lower band at least five times.
The attached chart shows a 1-minute crude oil futures chart with Bollinger Bands. TWO standard deviations of this moving average (known as the Upper and Lower Bollinger Band). You must always backtest your strategy to find out how the full trading plan stands against the test of time, before trading live account.
If the Forex trading strategies designed by traders are equally successful in both tests or segments it is a sign that the automated strategy works and is truly profitable. If so, you have a long trade setup (buy signal), and you can go long (buy) at close of the candlestick which has broken below the BB deviation 1 upper band.
Now that we are familiar with the structure and the signals of the Bollinger Bands, it is now time to shift our focus a bit, and take a look at a couple of trading strategies that can be incorporated using the Bollinger Bands. It contains a lot of the elements that are normally missing in most forex strategies out there, and you will see this when you download it.
So far we've seen the basic strategy slightly outperforms Buy & Hold but with considerably lower drawdowns. A Bollinger Band scalping strategy applies easily, and you can trade the whole move until its end. In fact, price will be making new highs in an uptrend and new lows in a downtrend, hitting and exceeding the bands, quickly taking out the stops on trades taken directly on the bands.
Q2:same as above we should sell below the position (4) because of forming shooting star candle stick which breakout BB1 lower band and two previous candles that closed upper BB1 lower band. Forex market is high-yield and risky mean of taking profit by operations with the currency rates.
The Bollinger Bands with candlestick patterns is a well-regarded strategy as well. This strategy is for those of us that like to ask for very little from the markets. In this manner, the 20-period SMA breakout can be used to set exit points after entering a Bollinger Bands trade.
The common actions you expect in Bollinger bands are the widening and tightening of the upper and lower bands. Bollinger Bands Trading Strategy Now, take that one step further and apply a little candlestick analysis to this strategy. This the main strategy from Steve Primo's and for continuation trading he uses Bollinger Bands with his own fractals (only 3 bars not 5 bas like Bill Williams Fractal).