Bollinger bands strategy scalping
This scalping system uses two types of Bollinger Bands and an Exponential Moving Average.
Bollinger Bands Technical Indicators and Forex Trading Strategy
It can be used on any currency pair and the time frame could be set from 1 minute to 15 minutes, but it seems to be working best on the 5 minutes chart. Bollinger Bands is a technical indicator discovered by John Bollinger.
This system uses one Bollinger Bands with a moving average of 21 and a standard deviation of 2 and one Bollinger Bands with the same moving average but with a standard deviation of 3. The idea of the system is to look for the moments when the price touches the upper or the lower layer between the standard deviation of 2 and standard deviation of 3.
John Bollinger's Official Bollinger Band Website
Using EMA will help the trader follow the important trend. If the price it is above the EMA the trader will look only for long entries. If the price is under the EMA then the trader will look for short positions. The signal would be a candle which touches or better closes inside the layer between the two deviations and the confirmation would be a candle of the opposite color signaling the reversal. If the conditions are fulfilled a trade should be opened on the opening of the third candle.
Look over the example bellow for better understanding. The same system can be applied also if the price is under the EMA. Sylvain- the p erson who wrote this article never tested this strategy. Of course it describes a strategy not a system, so the article doesn't include much detail. The stop loss cannot be set this way.
The entry trigger shouldn't be conditional on a trend, and a trend shouldn't be based on the position of the price to a MA. It will result in plenty of positions taken Also the BB deviations are to think about. Just applied this system on 5 currencies among the advised ones, 5M charts, on a test account of course. Advanced Forex Scalping Bollinger Strategy By Silvia Gabor.
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