Two Bands Reversal is a forex
strategy that find the conditions for trading when there are extreme
oscillation of price between two Bollinger Bands.
Time Frame 15 or higher.
Currency pairs: EUR/USD, USD/JPY,
EUR/JPY, GBP/JPY, AUD/USD, USD/CAD, AUD/JPY, EUR/NZD, NZD/USD.
Forex Indicators:
Bollinger Bands (period 20, deviation
2.0);
Bollinger Bands (period 100, deviation
2.0).
Trading rules Two Bands Reversal
Buy
When the upper band of the Bollinger
Bands (20 – 2.0) breaks the upper band of the Bollinger Bands (100
– 2.0), wait that the price come back into the Bollinger Bands (100
, 2.0). Open a buy order at the opening of the next bar.
Place initial stop loss at the previous
low swing.
Make profit with ratio stop loss 1.4
(example SL 20 pips, profit target= 28 pips) or when the price
touches the opposite band of BB (20, 2.0)
Sell
When the lower band of the Bollinger
Bands (20 – 2.0) breaks the lower band of the Bollinger Bands (100
– 2.0), wait that the price come back into the Bollinger Bands (100
, 2.0). Open a sell order at the opening of the next bar.
Place initial stop loss at the previous
high swing.
Make profit with ratio stop loss 1.4
(example SL 20 pips, profit target= 28 pips), or when the price
touches the opposite band of BB (20, 2.0)
In the chart below the examples.
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