Bollinger
Bands Spike Scalping Strategy it is a strategy that can be applied to
all time frames in this case I show an example of application to a 1
minute time frame, I repeat that this method can be applied to any
time frame.
Setup Strategy
Time Frame 1 minute or
higher
Currency pairs: any.
Indicator
Bollinger
Bands
Trading Rules
Apply standard default settings for Bollinger Bands on a 1-minute chart. When the price extends beyond the bands by more than 8/10 pips, consider a trading opportunity.
Long Trades
Enter a long position when the price extends 8/10 pips below the lower Bollinger Band.
Confirm the setup by observing the 5-minute chart showing the price below the lower Bollinger Band.
Set the stop-loss order 10 pips below the entry point.
Exit the trade when showing 10/15 pips profit.
A second entry is permitted if the price moves 15 pips below the initial entry, with the stop-loss adjusted accordingly. However, refrain from further trading if two consecutive positions are stopped out.
Short Trades
Enter a short position when the price extends 8/10 pips above the upper Bollinger Band.
Confirm the setup by observing the 5-minute chart showing the price above the upper Bollinger Band.
Set the stop-loss order 10 pips above the entry point.
Exit the trade when showing 10/15 pips profit.
Similar to long trades, consider a second entry if the price moves 15 pips above the initial entry, with appropriate adjustments to the stop-loss. However, if the second position is stopped out, refrain from further trading temporarily.
Examples
The screenshot below shows a scalping trade on the 1 minute
chart. The closing figure of the lower Bollinger Band on the
previous candle is 1.4649 and the price went down to 1.4639 on
the next candle 8/10 pips below the Bollinger Band figure,
triggering an entry setup.
After confirmation from the 5 minute chart that the price was
also below the lower Bollinger band, an entry was made at
1.4641 with the 2 pip spread and a stop was placed 10 pips
below the entry. Profit was taken at 1.4654 for +13 pips.
The next example of a long trade captures 11 pips profit.
When the priced moved outside the lower Bollinger Band we
had a look at the previous candle and the closing Bollinger Band
figure (1.4575). This meant if the price went as low as 1.4565 or
lower we would enter a trade to go long, if there was
confirmation on the 5 minute chart. A trade was taken at 1.4565
with a 2 pip spread giving us an entry price of 1.4567 with a 10
pip stop at 1.4557.
The trade was closed out at 1.4578 for 11 pips profit.
Confirmation to take the trade on the 5 minute chart (below).
n this example the entry was confirmed to go short at 1.4708 on the 5
minute chart below, 8 pips above the close of the Bollinger Band
from the previous candle at (1.4700), a stop was placed 10 pips
away. Unfortunately, this first trade was stopped out at -10 pips
and the price carried on upwards. After it had moved 5 pips
above our first trade`s stop, a second trade was placed to go
short at 1.4723 with a stop 10 pips above 1.4733. This trade
was successful with a +15 pip profit wiping out the loss on the
first trade and coming away with +5 pips.
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