Bollinger Bands and MACD Reversal Strategy

The Bollinger Bands and MACD reversal strategy is a classic yet highly effective basic trading approach. Its logic is straightforward: traders wait for specific conditions to align before making their moves.

Setup and Strategy Details

  • Timeframe: Suitable for 5 minutes or longer timeframes.

  • Currency Pairs: Works well with any pairs, but particularly effective with EUR/GBP, AUD/NZD, and AUD/CHF.

  • Trading Style: Applicable for both day trading and swing trading


  • Bollinger Bands and MACD Reversal Strategy

    Indicators

    1. Bollinger Bands (25, 2.5)

      Simple Moving Average (SMA) Periods: 9 (applied to the closing prices).

      MACD (Moving Average Convergence Divergence):

      • Parameters: 7, 21, 9

        Trading Rules

    Buy Signal:

    1. When the price touches or exceeds the lower Bollinger Band:

      • Wait for the price to be greater than the 9-period SMA.

        Confirm the buy signal when the MACD crosses upwards.

    Sell Signal:

    1. When the price touches or exceeds the lower Bollinger Band:

      • Wait for the price to be greater than the 9-period SMA.

        Confirm the sell signal when the MACD crosses upwards.

    Risk Management:

    • Stop Loss: Set at the previous swing’s high or low.

      Take Profit: Either at the middle Bollinger Band or with a risk-reward ratio of 1:1.15.

    Remember to adapt this strategy to your risk tolerance and trading preferences. Happy trading!

    Bollinger Bands and MACD Reversal Strategy

    Bollinger Bands and MACD Reversal Strategy

Post a Comment

Previous Post Next Post