Three Bollinger Bands Scalping is a strategy based the price action reaches extreme area of the Bollinger bands.
Setup Strategy: Currency Pairs EURUSD, GBPJPY, USDCHF, AUDNZD, EURGBP.Time frame: 1M., 5M.Spread max:0,0002 (ECN Account);Price: Bar Chart.
Indicators:
1) Bollinger Band (50) deviation 2 color red;
2) Bollinger Band (50) deviation 3 color orange;
3)Bollinger Band (50) deviation 2 color red.
Sell:When price crosses the upper red b at least half way to the orange b (if it gets to the yellow b is better but not as usual) Then the price will tend to retrace towards the center of the bollinger bs you profit form this retracing.
Buyit is the same as selling, the difference is that we will wait for the price to range between the lower red and yellow bands, and trade the retracing towards the center.
Profit Exit: Go for 5 to 10 pips, or exit at middle band.
Stop Loss: To have two kinds of stops: time based and loss based.
Time based:Try and figure out how long will it take the market to get in your expected direction, if the time that you planned is already due, then close the order. No point on waiting for a loss..
Stop Loss: Since you are trading a very tight time frame your stops should also very very tight. Sometimes, you will profit from a 3 minute trade and you wont be able to set a proper S/L. So your stops will be given to you by your money management system.
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