The Bollinger band with awesome oscillator forex trading strategy is simply made up of two forex indicators as the name says:
bollinger bands indicator
awesome oscillator indicator
Timeframe: 1 hour and up
Currency Pairs: Preferably any currency pairs with low spreads but if you use currency pairs with high spread, your stop loss should be larger to account for the spreads.
A candlestick must break the middle bollinger band and close above it.
This must correspond to the awesome oscillator having a green bar above zero level.
Place a buy stop pending order 2 pips above the high of the that candlestick
Place your stop loss at least 2 pips below the nearest swing low or if that is too far away, you can place it “x” pips away from the entry price but make sure it is not too close that you get stopped out prematurely.
For take profit target, aim for the previous swing high or 2-3 times more than what you risk in that trade. For example, if you risk 20 pips, then aim for 40 to 60 pips profit.
A candlestick must break the middle bollinger band and close below it.
This must correspond to the awesome oscillator indicator having a green bar below the zero level.
Place a sell stop pending order 2 pips above the low of the that candlestick
Place your stop loss at least 2 pips above the nearest swing high or if that is too far away, you can place it “x” pips away from the entry price but make sure it is not too close that you get stopped out prematurely.
For take profit target, aim for the previous swing low or 2-3 times more than what you risk in that trade. For example, if you risk 10 pips, then aim for 20 to 30 pips profit.
As you can see on the two charts above, price moves well ahead before the indicators give you the sell or buy signals.
there will be times when the price level where you enter is the time when the market decided to reversed and therefore if your stop loss order is too close, you will get stopped out.
placement of stop loss at an arbitarly distance like “x” pips away from entry price is not an ideal way and you may get stopped out frequently. The best place to place stop loss are above resistance levels/swing highs for sell orders and below support levels/swing lows for buy orders. If you can use those, you have less chance of getting stopped out but you see, sometimes these levels can be too far away therefore you have to place your stop loss “x” pips away which I said is not really ideal.
this forex trading strategy is a trend trading system therefore you’ll have too many false signals in a ranging market.
It is a very simple forex trading strategy that is very easy to use and understand
in a good trending market, you have the potential to make a good amount of pips.
You may like to also read about the (click link) Relative Vigor Index (RVI) Forex Trading Strategy or the bollinger band squeeze trading strategy.
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