Most traders are guilty of being perfectionists. Traders are all the time on the look out for the most effective indicators and the most effective trading strategies in the trouble of consistently improving their trading performance. Nevertheless, perfection is unimaginable to realize if foreign currency trading. It is because trading statistics is all the time a results of probabilities. There can be some wins and a few losses. Although perfection shouldn’t be the goal, this habit of continually improving should lead traders to trade setups with the most effective opportunities.
Probably the greatest opportunities within the forex market often occur during price extremes. It is because market sentiment is commonly like a pendulum. Traders would often dive in on extreme price swings as this might mean a deep discount for savvy traders. Traders often quickly buy forex pairs which can be oversold and sell pairs which can be overbought. This behavior often push price to the wrong way which could then end in a brand new trend being formed.
Trend reversals are sometimes seen just as a straightforward trend reversal. Nevertheless, when you would examine trend reversals closely, you’ll notice that trend reversals often begin as a shift in market sentiment coming from an overbought or oversold condition. Traders could either trade because the trend reversal is confirmed or trade because the market begins to reverse from an overbought or oversold condition.
Bollinger Bands
The Bollinger Bands is a novel technical indicator since it provides traders vital information using only a single technical indicator. It provides information regarding trend, volatility, momentum and overbought or oversold prices.
The Bollinger Bands consists of three lines. The center line is preset as a 20-period Easy Moving Average (SMA). Traders can use this line to assist them discover trend direction based on the situation of price motion in relation to the road, in addition to the slope of the road. Trend reversal triggers may also be identified based on the crossing over of price motion and the center line.
The outer lines are standard deviations based on the center line. It will likely be preset at +/-2 standard deviations. This line may be used to discover volatility, momentum and overbought or oversold prices.
Traders can discover volatility based on the contraction and expansion of the outer lines. Contracting lines indicate low volatility, while expanding lines indicate high volatility.
The outer lines may also be used to discover momentum breakouts. Strong momentum candles breaking outside of the band could indicate a momentum breakout.
However, the identical lines may also be used to discover reversals from an overbought or oversold market. Price motion showing signs of price rejection pushing against the outer lines indicate a probable mean reversal coming from an overbought or oversold price.
BB Alert Arrows
The BB Alert Arrows is a custom technical indicator which relies on the Bollinger Bands.
As discussed earlier, the Bollinger Bands may be used to discover mean reversals. The BB Alert Arrows simplify the means of identifying probable mean reversals by plotting arrows indicating such possible conditions.
An arrow pointing up indicate a bullish mean reversal which may be attributable to an oversold market price. However, an arrow pointing down indicate a bearish mean reversal which may be attributable to an overbought market price.
Traders can use these arrows as a mean reversal entry signal.
BB Win
BB Win is one other custom technical indicator which relies on the Bollinger Bands. It is usually a component of the oscillator family of indicators.
This indicator simply transposes the Bollinger Bands into an oscillator plotted on a separate window. The difference is that it has its midline fixed at zero, which relies on a moving average.
Volatility may also be identified based on the expansion and contraction of the lines.
One other moving average line is plotted by the indicator which relies on a moving average line. Trend reversal signals may be identified based on the crossing over of the road from positive to negative or vice versa.
Trading Strategy
Bollinger Bands Big Win Forex Trading Strategy goals to capture huge trend reversals that begin from a mean reversal coming from an overbought or oversold price condition.
Overbought or oversold price conditions are identified based on price touching the outer lines. Nevertheless, mean reversal signals are confirmed using the BB Alert Arrows indicator. Arrows plotted while price motion is rejecting the outer lines is confirmed as a mean reversal signal.
Trend reversals are then confirmed based on the crossing over of the red line of the BB Win indicator, from positive to negative or vice versa.
Indicators:
- Bollinger Bands
- BBalert_Arrows
- BBWin
Preferred Time Frames: 1-hour, 4-hour and every day charts
Currency Pairs: FX majors, minors and crosses
Trading Sessions: Tokyo, London and Latest York sessions
Buy Trade Setup
Entry
- The BB Alert Arrows indicator should plot an arrow pointing up while price motion is showing signs of price rejection pushing against the lower Bollinger Band.
- The red line of the BB Win indicator should cross above zero.
- Enter a buy order on the confirmation of those conditions.
Stop Loss
- Set the stop loss on the support below the entry candle.
Exit
- Close the trade as soon because the BB Alert Arrows plot an arrow pointing down.
Sell Trade Setup
Entry
- The BB Alert Arrows indicator should plot an arrow pointing down while price motion is showing signs of price rejection pushing against the upper Bollinger Band.
- The red line of the BB Win indicator should cross below zero.
- Enter a sell order on the confirmation of those conditions.
Stop Loss
- Set the stop loss on the resistance above the entry candle.
Exit
- Close the trade as soon because the BB Alert Arrows plot an arrow pointing up.
Conclusion
Trend reversal strategies that begin from an overbought or oversold price condition using Bollinger Bands is a staple strategy utilized by many beneficial forex traders. This often requires traders to have a great understanding of price motion, price candle patterns and the like.
Nevertheless, this won’t come easy to recent forex traders. Using supplementary technical indicators similar to the BB Alert Arrows and BB Win indicator simplifies the method. Traders can begin from this and develop to a full-blown price motion and Bollinger Band based traders as their skills improve.
Forex Trading Strategies Installation Instructions
Bollinger Bands Big Win Forex Trading Strategy is a mixture of Metatrader 4 (MT4) indicator(s) and template.
The essence of this forex strategy is to rework the amassed history data and trading signals.
Bollinger Bands Big Win Forex Trading Strategy provides a chance to detect various peculiarities and patterns in price dynamics that are invisible to the naked eye.
Based on this information, traders can assume further price movement and adjust this strategy accordingly.
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Find out how to install Bollinger Bands Big Win Forex Trading Strategy?
- Download Bollinger Bands Big Win Forex Trading Strategy.zip
- *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
- Copy tpl file (Template) to your Metatrader Directory / templates /
- Start or restart your Metatrader Client
- Select Chart and Timeframe where you would like to test your forex strategy
- Right click in your trading chart and hover on “Template”
- Move right to pick out Bollinger Bands Big Win Forex Trading Strategy
- You will notice Bollinger Bands Big Win Forex Trading Strategy is accessible in your Chart
*Note: Not all forex strategies include mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.
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