Forex, Bollinger Bands, and Excel

Double Bollinger Bands Strategy is a mechanical trading strategy. It means it doesn’t need analysis and interpenetration to decide whether the formed trade setup is strong enough to enter the market, or it is weak and you’d better to skip it and wait for a better one.

It is as simple as it is explained above. A featured listing does not constitute a recommendation or endorsement. Also candle 3 closes almost below the lower BB2 which is also not optimal, but still acceptable these extra rules are explained in the second article i linked. M-top or double top W-bottom or double bottom What we are looking for is to see that a particular support of resistance level is weakened after at least 2 bounces before an actual reversal takes place. July 12, at 4:

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Bollinger Bands consist of a middle band with two outer bands. The middle band is a simple moving average that is usually set at 20 periods. A simple moving average is used because the standard deviation formula also uses a simple moving average. The look-back period for the standard deviation is the same as for the simple moving average.

The key points of reference are band bounces and squeeze reactions. Skill in interpreting and understanding Bollinger Band signals must be developed over time, and complementing the Bollinger Bands tool with another indicator is always recommended for further confirmation of potential trend changes. In the next article on the Bollinger Bands indicator, we will put all of this information together to illustrate a simple trading system using Bollinger Band analysis.

Trading Foreign Exchange on margin carries a high level of risk and may not be suitable for all investors. The possibility exists that you could lose more than your initial deposit.

The high degree of leverage can work against you as well as for you. Brought to you by: Was this article helpful? We use cookies to enhance your visit on our website. If you continue to use the website, we assume that you agree to the use of cookies. In fact, I had decided to not trade again but to just invest using value investing.

But I still got burnt on good companies because of there are just too many variables, e. Hence, I find currencies are much purer. And the market size is so large that it is not easily manipulated. Having said that, I have actually read so many of your articles. Including the one you mentioned above.

But because I read so much, whilst I may remember the pattern, I may not remember the currency pair and the dates. Chris, your article https: I am actually talking about a bullish entry on Are you talking about the same thing? You did go long on This is question was to illustrate whether a breakout where the candles are still outside the range and not making it back into the BB range can still be considered as a strong trade?

Now, you are right about not too hurry it up, and read up the articles patiently. A very important advise. I promise to remind myself on that.

I am trying to do backtesting now, and see what the outcome is. We also talked about that too strong weekend gap that GBP cross currency pairs opened with: It was a strong setup on the weekly, but on the daily it formed on a too bearish market when the So we avoided it on the daily.

Dear Chris When we look for nearest resistant or support lines some of them turns from downside to upside the other opposite. So if we think about going long or short which one we should consider? Both or opposite turning point? I hope explanation of my question is clear enough. English not my first language Thank you Dogan. When there is a downtrend or range, a descending resistance is a better choice to go long. And visa versa for going short.

Thank you for time to answer me. I hope this is not a silly question. When I want to go long as using line chart over the price level there are some turning points. I know old support and resistance turning to to each other. Do I need to consider all this turning points as resistance or just only clockwise? Your candlestick explaination is simply superb, i have learned and practised in demo account and was successful.

How can I change that and see exactely what I see in your charts? Hello Chris, thanks for sharing your knowledge and experience. Just a quick question about engulfing strategy, does it also work on weekly and monthly timeframes? With my shortage of experience I think I will probably take 4 false signal because of many positive points. Too strong engulfing candle which is break BUB and engulf too many candles. Abandoned baby candle above BUB before engulfing candle 3.

There are signs of exhaustion and bears pressure. Consolidation for almost three weeks after 3 false signal, which I will consider like hesitation. Based on that market condition I will probably take this trade signal with riskier SL which is good and after being stopped out, continuation candle while gave me new signal to enter on trade. It is formed by a too long candlestick with a considerable lower shadow.

Indeed, it is not a false signal. It is a bad signal. Thank you so much Chris you are indeed a angel. I do have a question though. Please how can one use this strategies to trade shorter time frames like 5, 10, 15, 30 minutes also can this be applied to binary options? You can use the same way on any time frame or price chart.

Just keep in mind that shorter time frames are riskier to trade. Do you mean that, if the closing price of a candle is above an upper band, there is no band breakout? But the closing price of the third candle of the first example, it closed above the upper band, so how can it be a BB breakout?

Or were you doing simple technical analysis? Thank you very much. Oh sorry, english is not my first language. But, about the middle band, you said we can use it to trade continuation signals, but you also said that is risky or riskier than your normal trading.

So, how can I trade continuation signals, if there are no strong reversal signals? Thanks a lot for your time and help. You trade the strong candlestick patterns that for as continuation setups. The power of the candlestick pattern which is agreeable to the trend is important. What about the double bollinger bands? Everything about that system is explained here: Yeah, I read it all, and I think is the easier continuation signal? What do you think? Is the BB1 breakout, even realible for your sistem?

My question is if a candle shadow break above the upper Bollinger, bullish or bearish candlestick, with out creating any pattern, how it can be explained. It is just a strong price movement and deviation from the middle band.

It means the related party is controlling the market strongly. When the shadow is too long, it means the opposite party is trying to take the control, but have not been successful yet. Thanks Chris you always put the psychology of trading and traders in your articles which make them unique.

For the first time in my life I can get a little feeling that I really understand how market works. I just need to read your articles more carefully and do some highlights.

Your explanation of Bollinger bands in this article was awesome. It means a big Bullish pressure is imposed to the market suddenly.

What is happening Chris when the shadow occur above the candle? And the explanation is the same if the candle is Bearish? Basically do we have to follow the candles when breaking out the bollinger bands or the shadows are most important. Hi Chris Once again i am surprised by your perfectly written Article. So many important sentences in this Article. Again your way of explaining the psychology of the market is so catching for me.

Please start from here: The stock ex tcs has reached the upper band ,still it is bullish one or some reason like some profit booking in tcs can reduce the stock little lower or the index like Nifty is consolidating so tcs can lower so that days the False signal is formed.

If Nift is up or tcs has some gud news it will bounce back. If you short that time that will hit your stoploss.

Then only we can short. Hello Dear Chris I am Learning too much From Your articles but i am new learner so i am in little confusion after reading the analysis of strong piercing line pattern article that you said in above paragraph 2. Reversal trends 1st Paragraph how candle stick 1 and 2 make piercing line Pattern I mean in that pattern 1st candle is bearish and 2nd is bullish and close little below the 1st candle other wise it would be Bullish Engulfing…..

Can you suggest me how the Bolinger band average period and candle stick time 5 min,10 min,30 min ,1 hour chart for intraday trading. Now I use the Bolinger period average period as 12 days and 5 minutes candle chart for intraday trading in index. But some says the upper band is overbought area and lower band is oversold area.

I though have one question; Is this Training based on long term period traders, 1 hour, 4 hour,1 day? It is hard to check one chart by one chart especially during working hours. Appreciate if you could consider, thanks, Chin. About the bollinger bands, I have one question. For example, we know that if the bands are too close, it means that the interest on buying and selling is low. But, what does it mean, when one band is downward, while the other is upward? Market indecision and high volatily?

If a chart is volatile and is trending down strongly, but the lower band points up, it is because, after an high volatily, the market is oversold, and will likely bounce up from close support level?

How do the bands relieve it? This occurs usually when the price starts taking a direction suddenly after a while of moving sideways. After few candlesticks, both bands will follow the price direction. It was among one of the old articles of this site. I am now reviewing and editing them. I have added some more tips and delete the obsolete parts. I hope you are fine.

Doji article is closed for comment,so I will ask you here. As usual, thank you for an excellent article. You also said that 8 was confirmation for the 7 formation.

What about the two candlesticks immediately following 7? One is a very small bodied bull candlestick followed by a large strong bodied bear candlestick that even breaks the Bollinger middle band. Why would you need 8 for confirmation when you have such a strong bearish engulfment pattern immediately following 7? Are there any negative points that would negate that bearish engulfment pattern? Those small candlesticks are just 2 hours old candlesticks that were used to form on the platforms on Sunday afternoon on the daily chart.

It was because of the broker sever time difference and market open on Sunday afternoon. They are not valid daily candlesticks. But sometimes is difficult to determine trend,because after strong trend the market is behaving strangely. In chart below we had strong downtrend in previous structure. The angle is very steep, and after then we should wait for trend continuation setup,right.

But after that the price is start to go up and down, up and down,and we did not have a clear trend. You had to wait for a trend continuation setup after the price went up. But such a setup never formed. As a result, you stay out. This eBook shows you the shortest way to acheive Financial Freedom: Just before you go, did you check This System?

Make sure to do it now, otherwise you will regret. Article by LuckScout Team. November 17, at December 1, at 2: December 28, at 3: March 13, at 1: March 12, at March 20, at April 7, at June 26, at 4: July 2, at 6: July 2, at 1: July 5, at July 16, at 2: August 15, at 2: August 15, at 3: August 15, at 9: August 26, at September 6, at September 13, at 2: September 14, at 4: September 14, at September 15, at 5: October 15, at 1: October 15, at 2: October 16, at 7: November 26, at 8: November 27, at 2: November 28, at 2: November 28, at November 29, at 6: November 29, at 3: November 29, at 7: November 30, at January 22, at 7: January 23, at 2: January 23, at 9: February 9, at 4: February 16, at 3: February 17, at 8: February 17, at 1: March 1, at 4: March 1, at 5: March 17, at 5: March 18, at 8: March 18, at April 15, at 8: April 15, at 2: April 15, at 3: April 16, at 3: May 3, at May 4, at 2: May 4, at 3: May 4, at 4: May 5, at 4: May 5, at 5: May 6, at 5: May 31, at June 1, at 2: August 2, at