Bollinger bands is probably one of the best trading indicators that have ever been developed. Let me today look at a simple trading system that you can employ to trade various financial markets using this indicator.
Bollinger band bottom / top
The trading system is based on Bollinger (called Bollinger Bands) indicator strips.
The system can be adapted to any currency pair, the proposed extended periods of time: 1D and 4H. Used for indicators: Bollinger bands
Trading will begin considering full-time schedule. First necessary to determine the overall rate trend (the trend). If the rate of full-time schedule is below the median Bollinger line – then the trend is descending. Rates at higher secondary Bollinger lines – identifies rising trend. After evaluating what is the direction switch to a lower schedule time period (4h.).
Knowing the basic course of a security, you should try a weakening trend, correction. If the overall direction of a security is rising, then use 4h chart. Schedule waiting for the lower rate to affect Bollinger line, then it is a buying signal. When we have a common trend as negative, then we have to wait until 4 pm schedule of rate will rise to the upper band. This signal may be for sale.
Observing the two periods of the schedule is likely to open a more accurate position. Trade in the longer term charts of signals are received less frequently, but a withdrawal signals are likely to increase profit potential. You can try to trade with the 4h. and 1h. charts.
This indicator can also be well used in trading ranges, not only corrective trends, but that is not the topic of the article and I do not want to expand on that. Practice this trading strategy on a demo account to see for yourself how the indicator works.