Easy strategy using Bollinger Bands

30.07.2018 / 12:03

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The above chart is the EURUSD H4 chart. The Bollinger band indicator should be set to 20 periods and 2 standard deviations and the Bollinger band width indicator should be switched on. When trading using this strategy, we are looking for contraction in the bands along with periods when the Bollinger band width is approaching 0.010.

John Bollinger has calculated the distance from the top to bottom line of the indicator and the range between them. The more lines narrow, the more Bollinger band width goes to 0.010.

How do I trade it? When all the conditions are in place, it signifies a significant price move is ahead as indicated within the green circles above.

A BUY signal is generated when a full candle completes above the simple moving average line.

A SELL signal is generated when a full candle completes below the simple moving average line.

Stops should be placed at the high or low of the preceding candle, or, to allow for a maximum loss of 3% of your trading capital, whichever is the smaller.

Trader Georgi Bozhidarov

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Easy strategy using Bollinger Bands

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