surangadesilva

Maximize your Profits with Bollinger Bands

FX:USDCHF   U.S. Dollar/Swiss Franc
26201 45 50
Bollinger Band Strategy is One of the Most Profitable Strategy Used by the Trades who earn lots of Money!!!

You can't just use Bollinger Bands to Trade and Earn Money as you need to confirm the Break Out Signal that you get after a Bollinger Band Squeeze.

Here are some tips how to confirm that:

1. Always looks for Bollinger Band Squeezes as you will find Price Break Outs most of the times
2. Use RSI to confirm the Price Break Out
3. Make sure RSI is not Overbought/Oversold to have a Major Price Break Out
4. Look for Bollinger Band Width to see whether its Rising as well
5. When there's a Major Price Break out it will go on for 1 -3hrs so you can take multiple entry points to Maximize your profits
6. Always check the Support/Resistance levels as there's possibility of the Price reversing the other way
7. I would also recommend to check the investing.com and look for Strong Buy/Sell Signal before you enter your Trade
8. There will be fake break outs where the price go the otherway
9. You can have stop losses and enter the Trades on the otherway if there's a fake breakout

Few other Tips to Enhance the above:

1. Use default MACD to reconfirm the Trend Direction (Thanks for the Idea from HamzaLeith)
2. Check the Direction of the Upper/Lower Bands.

For Bullish reversal's and continuations (opposite is true for bearish reversals or continuations)

1.) Price approaches the Buy Zone and the upper and lower bands remain flat. Reversal - Likely a sharp reversal to the lower band. Because both bands are flat this will likely be short lived.

2.) Price approaches the Buy Zone and the upper band goes up and the lower band is flat or moving up slightly. Continuation - Price will likely continue up slowly for a time.

3.) Price approaches the Buy Zone and the upper band goes up and the lower band goes down. Continuation - Price will likely move up fast and furious. This is the best continuation pattern for the bands. This is a rapid expansion of volatility . You will experience "fake out's" sometimes but most of the time this set-up will produce some good profits when executed properly.

4.) Price approaches the Buy Zone and the upper and lower bands both go down. - Reversal - This is likely to result in a reversal

Source: http://www.eezybooks.com/StoreFront/Bollinger-bandssecret.aspx

Summary: Use RSI / Bollinger Band Width & MACD Indicators to Confirm the Signal

Hope this Helps Anyone who like to maximize the profits
Thanks for your work mate!
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Thanks for this post. Working on a complet signal algo including all of this.
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Am a starter, am madly in love with Bollinger___The way you explained your thing is fantastic.....but some how am still confused so I was asking do you have a video on this your Bollinger band Tutorial (like having it on youtube or some where)
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Really useful..
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SImple Great!!!. Previously I was using only BB with Std Deviation 2....Now with addition of BB with Std Deviation 1 has improved by script.
It works great for Futures.

Thanks a Lot
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This is a great article on reversal trading (signals) with Bollinger bands... enjoy
http://www.harmonictrader.com/price_patterns3d.htm
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HamzaLeith HamzaLeith
http://www.fxkeys.com/how-to-use-bollinger-bands-in-forex-and-stock-trading/
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Guys I wanted to show you something very typical of the use of bollinger bands. It is called a head fake. After the squeeze of the bollinger bands a breakout always occurs. However what is very characteristic with bollinger bands is that many times trades get "tricked" regarding the direction of the breakout by something called a Head Fake. I think we are witnessing one of these right now with the GBPUSD. Take a look at a chart and let me know when you don't understand what I mean or perhaps disagree with with me so we can all learn.. Good luck guys.
snapshot
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HamzaLeith HamzaLeith
Sorry here is the right image...
snapshot
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surangadesilva HamzaLeith
Yes I have come across the Bollinger Band head fakes after Bollinger Band Squeeze when you expected a breakout/breakdown on the same direction. This is what I think is the best to over come this.

If anyone can Contribute their ideas to enhance this it will help anyone who is interested with this Strategy I guess.

I'm Using this example to Discuss this HeadFake:
snapshot


As you can see there was a downtrend to start with which didnt last long and then there was a long running uptrend.Most importantly I check Trend Angle of the 20 Period Simple Moving Average (20SMA) with MACD and this is what i check for the Trend Angle and MACD:

Trend Angle:

It is very important to zoom into the correct time frame to check the Angle.(Check my screenshot)
I'm doing 30min Trades for Breakouts so that I zoom the Chart to 30mins (Using Mouse Scroll) to have 30min time intervals on the bottom of the chart so that the Angle is accurate for the Trade that I'm doing

MACD:

For Breakouts (Uptrends) I check to make sure that MACD blue line is not crossed under red line so that the Trend can reverse downwards even the Angle is over 20degrees. If the MACD blue line is over Redline and the Angle is over 20degrees then i BUY.I do Opposite for Breakdowns (Downtrends)

Here's more detailed explanation using the Example:


1. BREAKDOWN - DOWNWARD TREND

- I checked the Trend angle but it's not over 20degress so I ignore that.
- I kept monitoring the Angle to see whether it goes over 20deg but it doesn't
- Ended up with a Headfake and Trend Reverse the otherway

2. BREAKOUT - UPWARD TREND

- I checked the Trend angle but i wait until it's over 20degrees.
- Price went over 20 degrees and I checked the MACD and Blue line is over Red line
- I wait until the Price come down to Upper Bollinger Band with Stard Deviation 1
which is the lowest position that I can take and then I buy for 30mins
- I wait for more price touches Upper Bollinger Band with Standard Deviation 1
- While the Angle is still over 20degress and MACD Blue line crossed Red line I BUY again
This is not that recommended but this is my last BUY of this Uptrend
- As soon as Angle goes below 20degrees with the MACD Blue crossed below Red Price Reverse
very quickly
- After the MACD blue line cross down the Red line it's not that safe to BUY if
the Angle is less than 20degrees. Check the Chart below:

snapshot


Summary:

- Zoom the Chart to see the correct Time Intervals on the bottom before checking Angle
- Keep checking the Trend Angle and dont Trade until the Angle is 20Degrees
- Trade until when the MACD blue line is not crossed under Red line (For Uptrend)
- You can take a risk to have your Last Trade is when the Trend Angle is still above
20Degrees but MACD Blue line Crossed the Red line for Uptrend of course (Opposite for Downtrend)
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