Algorithm strategy Forex «Bollinger on steroids»:
- D1 Candlestick Chart
- Bollinger Bands (20,1) — paint in blue (indicator Bollinger Bands) in the standard trading platform Metatrader 4 (located at — Insert / Indicators / Trends / Bollinger Bands).
- Bollinger Bands (20, 1.5) — paint white.
Opening of the transaction on forex strategy «Bollinger on steroids»:
Trade rules on the forex strategy is best to consider some examples.And so, there are two types of inputs in the market. Let’s call the trading signals for entry into the market, for simplicity — white signals and blue signals.
The basic rule of forex strategy «Bollinger on steroids»:
WHITE Trading Signals It’s always important THAN BLUE signals.
«White» trading signals for entry into the market.
This original way of trade, from which evolved the strategy forex, was founded precisely on the «white» trading signals. White signal vonikaet once the price touches the white band indicator Bollinger and then locked inside the channel. Let’s examine this principle in the figure.
2 green arrows.
These are 2 green arrows indicate to us when we enter into a deal to buy. As seen in these 2 cases, the price has reached the white line, and then opened trading position to purchase, at the close of a candle inside the channel. For these transactions, earnings rose to SMA (Bollinger midline).
3 red arrows.
The 3 red arrows indicate to us when we make a bargain sale. As can be seen in all 3 cases the price touches the upper Bollinger white line, then still closed within the channel. As a profit again using the same SMA on the daily range.
«Blue» trading signals.
«Blue» trading signals represent dwelleth between «steroid» part of this strategy. «Blue» trade signals are generated at a time when the price is within the channel, after which it goes beyond the blue line of the channel Bollinger. Let’s see how it works.
The price was within the channel, and then broke through the blue line up Bollinger. Pay attention to the fact that she has not reached the white line Bollinger, ie «White» trading signal was not. This trading signal for opening a long trading position (to buy). When the «blue» signals take-profit or put a warrant remains open until you see the next «White» signal. At this point the deal closes.
2 red arrows.
Price came out of the canal and crossed the blue line Bollinger down. These signals were unprofitable. But without losing trades do not happen to either one, even the most successful forex strategy.
Stop-loss orders to trade forex strategy «Bollinger on streroid:
Install safety stop-loss depends on you. I personally used to determine the safety stop-loss using the distance from the current on a chart to SMA (middle line of the Bollinger). Ie if the price is at 1.9635 and 1.9435 for SMA, my safety stop-loss order will be 200 points. Someone out such a large stop-loss does not like, but I prefer to use just such tactics set the stop-losses in the forex strategy.