Reversal trading with Bollinger Bands and ADX is a strategy based on retracements of price into Bollinger Bands. In other words the purpose of this trading system is to trade when decline the volatility. This a day trading strategy.
Time Frame 15 min.
Currency pairs: EUR/USD, GBP/JPY, USD/JPY, GBP/USD,
Forex Indicators:
Bollinger Bands (20 period, deviation 2.0);
Bollinger Bands (20 period, deviation 3.0);
ADX (14) look when ADX is below the 25 level.
Trading Rules
Buy
1. When the price break above the BB (deviation 3.0) wait that the price come back to close into BB deviation (2.0).
2. Check to see if ADX < 25.
3. Place Stop at 15 pips or below the lower band of BB (2.0).
4. Close half of position at +15, move stop on rest to breakeven (initial entry price).
Sell
1. When the price break below the BB (deviation 3.0) wait that the price come back to close into BB deviation (2.0) .
2. Check to see if ADX < 25.
3. Place Stop at 15 pips or below the upper band of BB (2.0).
4. Close half of position at +15, move stop on rest to breakeven (initial entry price).
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