Part 2 Creating the first Forex strategy – Bollinger bands

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect Choice For Beginners!
    Free Demo Account!
    Free Trading Education!
    Get Your Sing-Up Bonus Now!

  • Binomo
    Binomo

    Only For Experienced Traders!

Forex strategy on the Bollinger Bands BB Gann System

Forex Strategy BB Gann System It is based on Bollinger Bands and the Gann_HiLo indicator. It should be noted that the strategy is not 100% mechanistic, and some transactions are opened at the discretion of the trader.

Input parameters

  • Currency pairs: in the best way, the strategy proved to be in pound currencies, as well as highly volatile pairs like EUR / AUD.
  • Timeframe: testing was carried out on the H4 timeframe (perhaps, on other TFs, the strategy will also work, but testing was not carried out).
  • Bidding Time: any.
  • Risk management: After calculating the stop loss, choose a lot size such that the risk is no more than 2-5% of the deposit per transaction.

Setting indicators and forex strategy template BB Gann System

  • Unpack the archive with templates and indicators.
  • Copy the indicators to the MQL4 -> indicators folder.
  • We copy the templates to the templates folder.
  • We restart the terminal.
  • Open the chart of the desired currency pair.
  • Install the template named BBGann.

The graph should look like this:

Forex Strategy Template BB Gann System

Signals indicating the opening of a long position (purchase)

1. Stochastic oscillator moved from the sales zone to the purchase zone (that is, from level 25 to level 75; even better if the transition occurred from level 15 to level 85; the smoother and sharper the transition, the better).

2a. CCI indicator 34 left oversold and headed to the middle level (that is, crossed the lower level from bottom to top). At least one peak must be present in front of this cavity.

2b. The CCI 34 indicator left the mid-level and ended up in the overbought zone (that is, crossed the upper level from the bottom up). At least one peak should be present before this peak (which indicates a continuing uptrend).

Note: if signal 2b occurs, then usually the chart is strong uptrend. As a rule, the price is near the upper Bollinger band, which contradicts rule 3. In this case, you should wait for a rollback before entering the trade. Also, the price should not be far from the moving average. Otherwise, the trend may slow down and even reverse in the opposite direction, at least to the level of support, which is a moving average.

3. The price has crossed the middle line of the Bollinger Bands up or down (if other conditions are met, there should be at least some space between the price and the upper Bollinger level, although this rule can be violated when the bands are too close to each other).

4. The price did not break the upper Bollinger level (again, this rule may be violated if the range is too narrow).

5. The Gann Hilo indicator (blue line) is below the price.

Example of signals to buy on the forex strategy BB Gann System

Signals indicating the opening of a short position (sale)

1. The stochastic oscillator has moved from the buy zone to the sell zone.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect Choice For Beginners!
    Free Demo Account!
    Free Trading Education!
    Get Your Sing-Up Bonus Now!

  • Binomo
    Binomo

    Only For Experienced Traders!

2a. CCI indicator 34 left overbought zone and headed to the middle level (that is, crossed the upper level from bottom to top). At least one cavity must be present before this peak.

2b. The CCI 34 indicator left the middle level and found itself in the oversold zone (i.e., it crossed the lower level from top to bottom). At least one depression must be present in front of this depression (which indicates a continuing downtrend).

Note: if signal 2b occurs, then usually a strong downtrend is on the chart. As a rule, the price is near the lower Bollinger band, which contradicts rule 3. In this case, you should wait for a rollback before entering the trade. Also, the price should not be far from the moving average. Otherwise, the trend can slow down and even reverse in the opposite direction, at least to the resistance level, which is moving average.

3. The price crossed the middle line of the Bollinger bands from top to bottom or is at her.

4. The price has not broken through the lower Bollinger level (the rule may be violated if the range is too narrow; see purchase rules).

5. The Gann Hilo indicator (blue line) is above the price.

Example of signals for sale on the forex strategy BB Gann System

Moving average (red bold line) is intended for:

  • Identification of the trend direction (for example, if there are several consecutive peaks on the CCI indicator, the stochastic fluctuates in the buy zone, the price is above the Gann HiLo indicator and the red moving average, then the trend is most likely upward; otherwise, it will be downward)
  • Stop loss and take profit settings.
  • Definitions of support / resistance levels.
  • In fact, two schemes of operation are possible. In the first scheme, conditions 1, 2a, 3, 4, 5 are used; in the second – 1, 2b, 3, 4, 5 (the difference is only in conditions 2a and 2b).

Stop and Take Strategy

  • Fractal method: stop is set just below the nearest fractal down (if we buy) or slightly higher than the nearest fractal up (if we sell). Take profit is set equal to the size of the stop.
  • Based on Bollinger Bands: lower extreme – stop, upper – take (if we buy), upper extremum – stop, lower – take (if we sell).
  • The combination of fractals and bands: fractal down – stop, upper band – take (if we buy), fractal up – stop, lower band – take (if we sell). In this case, usually, the ratio of risk and profit is less than one.
  • The combination of bands and fractals: the lower band is stop, the fractal up is take (if we buy), the upper band is stop, fractal down is take (if we sell). The risk / reward ratio is usually greater than one.
  • By moving average: stop is set by fractal or strip, and take – by moving average. You should especially consider this option if the price has already pushed off from the moving average once.

It is recommended to set take and stop based on Bollinger Bands, as this indicator adjusts to the market. It is advisable to leave the stop intact (or move it in the direction of decreasing risk), and move the take in accordance with the movement of the strip (increasing or decreasing the possible profit).

Double Bollinger Band® Strategy to Trade Forex

The Double Bollinger Band® strategy has a wide variety of applications but provides the most value when assessing the momentum and volatility of price action. It allows traders to pinpoint entries and exits as well as identify when a trend is maintaining or losing momentum.

Keep reading to discover:

  • What is a Double Bollinger Band® strategy?
  • How to trade forex with Double Bollinger Bands®
  • Advantages and limitations of a Double Bollinger Band® strategy
  • Further reading on Bollinger Bands®

This article assumes the reader has a basic understanding of Bollinger Bands®. If you’d like a refresher, read our guide to Bollinger Bands® in forex trading .

What is a Double Bollinger Band® Strategy?

The Double Bollinger Band® Strategy makes use of two Bollinger Bands®in order to filter entries and exitsin the forex market. The strategy aims to enter long (short) trades when price breaks above (below)one standard deviation. The strategy can be applied to ranging markets, as a breakout strategy or when assessing the momentum/slowdown of an existing trend.

Add the following indicators to the desired market/security:

  1. Default Bollinger Band® (20 2). The first number relates to the simple moving average and the second, to the number of standard deviations from the mean/average.
  2. A second Bollinger Band® (20 1). Select the default 20 SMA but this time use the setting with only one standard deviation.

Before getting into the strategy, it is crucial to understand how to interpret the chart below as there is a lot to take in.

Dissecting the chart is easiest to do by starting at the middle and working our way outwards. The dotted line in the middle is the moving average. Then moving out in both directions, the green and red lines represent the single standard deviation, while the outermost lines (in black) represent the two standard deviations.

Statistically speaking, 95% of the observed candles should be contained within the two standard deviations, meaning traders will witness price moving within or across the various segments, triggering many signals.

The Double Bollinger Band® strategy incorporates three different zones.

  1. Double Bollinger Band ® (DBB) Buy Zone : This is the light blue area between the first standard deviation and the double standard deviation that is found above the 20 SMA. Presents a buy signal.
  2. DBB Neutral Zone : This is the purple area between the upper and lower, single, standard deviation. Price trading in this area could be indicative of a choppy market that lacks a directional bias. Trend traders are to avoid taking new positions in this zone. Signals a slow- down in momentum or the beginning of a ranging market.
  3. DBB Sell Zone : This is the light blue area between the single standard deviation and the double standard deviation that is found below the 20 SMA. Presents a sell signal.

All three zones can be seen in the chart below:

How to Trade Forex with Double Bollinger Bands®

The two main strategies to employ using Double Bollinger Bands® involve breakouts and trend trading and will be explored below.

Double Bollinger Band ® Breakout Strategy

The Double Bollinger Band® strategy can be applied when trading breakouts of an existing trading range by observing a break above/below the range; combined with a strong break into the DBB buy zone or DBB sell zone. Witnessing strong breaks provide a greater bias in favour of the breakout as traders look to avoid a false breakout.

Below is an example of a Double Bollinger Band® breakout scenario in the EUR/GBP chart. Towards the end of the range there is a break above the upper band of the single, standard deviation (green line) however, price hadn’t moved high enough to break out of the range. Traders should be looking for price to break out of the range and into the DBB buy zone, with strong momentum.

When looking for further confirmation, traders can view that the break occurs during a new expansion of the Bollinger Bands®, after a period of relatively low volatility (contracting Bollinger Bands®).

The large green candle, pointed out below, provides the necessary confirmation of a breakout and presents a strong buy signal. To mitigate risk, traders can place stops at the 20 SMA with targets set at key levels of resistance all while maintaining a positive risk to reward ratio .

Double Bollinger Trend Trading Strategy

The Double Bollinger Band® trend trading strategy allows traders to assess the momentum of an existing trend. It allows traders to exit on a slow-down or add to existing positions when momentum and volatility increase.

The example below takes a look at the same EUR/GBP chart after the breakout where the currency pair began trending. Price broke above the upper band of the single standard deviation and even breached the upper band of the uppermost line – representing two standard deviations.

Such momentum and volatility in the DBB buy zone presents a buy signal and the Double Bollinger Band® can be used to track the progress of this new uptrend.

As long as price remains between the buy zone and the 20 SMA (dotted mid-line), traders can maintain the long bias. The exit point can either be on a close below the mid line or a breach of the neutral zone into the DBB sell zone, depending on the level of risk tolerance. Those using the mid-line as a stop can manually move their stops along the 20 SMA as price rises.

Advantages and Limitations of a Double Bollinger Band® Strategy

There is no such thing as a strategy that works all of the time. Bearing this in mind, traders should be aware of the advantages and limitations of the Double Bollinger Band® strategy.

Advantages Limitations
Low volatility often precedes bigger moves. Having a double Bollinger Band allows traders to assess the degree of volatility when analyzing a potential trade Large moves into the buy and sell zone can reverse. Hence, risk management is key
Clear entry and exit signals
Easy to identify the momentum of current trend

Further reading on Bollinger Bands®

  • Bollinger Bands® provide traders with a visual representation of volatility in the market. Learn how to apply this indicator when trading forex with Bollinger Bands® .
  • The Bollinger Band and MACD strategy combines Bollinger Bands® with the MACD indicator to provide traders with insight into volatility, direction and momentum.
  • Find out what other indicators can be used to assess volatility in our guide to technical indicators defined and explained for forex traders .

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

An error occurred (500 Error)

We’re sorry, but a temporary technical error has occurred which means we cannot display this site right now.

Resource temporarily unavailable

You can try again by clicking the button below, or try again later.

Стратегии на основе полос Боллинджера

Стратегия “Полосы Боллинджера с индикатором RSI”

Возможности валютного трейдинга безграничны. Даже если трейдер использует стандартные индикаторы из МТ4, такие как полосы Боллинджера или RSI. Нужно осознать, что прибыльный сетап может быть и простым.

Самое важное при использовании простых индикаторов — четко определить момент открытия и закрытия сделки. Давайте рассмотрим интересную стратегию, где используется RSI и Bollinger Bands (ВВ).

Индикатор Волны Боллинджера — стратегии, принципы работы

Индикатор Волны Боллинджера – это еще одна версия скользящих средних. Инструмент образует канал на рабочем графике валютной пары, который состоит из трех линий. Центральная – обычная SMA 20. Две другие получены путем добавления и вычитания из средней двух стандартных отклонений. Рассмотрим работу индикатора Волны Боллинджера – стратегии и приемы торговли.

Полосы Боллинджера — стратегия для бинарных опционов

Полосы Боллинджера — один из самых популярных индикаторов технического анализа как на рынке Форекс, так и для бинарных опционов. Несмотря на то, что платформы последних на настоящем этапе не оснащены мощным функционалом, этот инструмент присутствует практически в каждом терминале каждого брокера. Тем не менее, предварительный анализ гораздо удобнее проводить в платформе МетаТрейдер. В чем преимущества индикатора?

Стратегия на основе полос Боллинджера – SMA и ВВ

Стратегия на основе полос Боллинджера “SMA и ВВ” предоставляет трейдерам возможность торговли на дневном и часовом графике любого актива. Используется всего 2 простых индикатора из стандартного набора МetaТrader4:

Стратегия на основе полос Боллинджера – RSI + BB

Стратегия на основе полос Боллинджера “RSI + BB” эффективно соединяет сигналы от двух индикаторов (полос Боллинджера и RSI), позволяя трейдеру уменьшить количество ложных сигналов. Давайте кратко рассмотрим характеристики обоих индикаторов, чтобы лучше понимать, почему их комбинация позволяет улучшить показатели торговли.

Стратегия на основе полос Боллинджера – BB + ZigZag

Стратегия на основе полос Боллинджера “BB + ZigZag” позволяет трейдеру торговать, комбинируя эти 2 индикатора, что увеличивает количество прибыльных сигналов. Для лучшего понимания сути стратегии рассмотрим, как работают оба индикатора. Полосы Боллинджера (ВВ) представляют собой 3 полосы – среднюю, нижнюю и верхнюю. Их стандартные настройки следующие: средняя – это Simple Moving Average (SMA), период 20, нижняя – SMA минус 2 СО (стандартных отклонения), верхняя – SMA плюс 2 СО. По сути, ВВ представляет собой коридор, при выходе цены за его границы трейдер может заключать успешные сделки.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    The Best Binary Options Broker 2020!
    Perfect Choice For Beginners!
    Free Demo Account!
    Free Trading Education!
    Get Your Sing-Up Bonus Now!

  • Binomo
    Binomo

    Only For Experienced Traders!

Like this post? Please share to your friends:
Binary Options Trading For Beginners
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: