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about the bollinger band with the stochastics indicator trading strategy the bollinger band
with the stochastics indicator trading strategy is a very simple forex trading system to follow
in here i will show you how to use the system in general here is how the bollinger band forex
trading strategy works when price is touching the outer lines of the bollinger band it may that
may be a sign that the market may reverse so you look for a reversal candlestick signals to trade
for example if the price has been going up and touches the upper bollinger band line
you go short sell do the opposite when price touches the lower bollinger band line the middle
bollinger band line can be used as a reference line to move a profitable trade to break even or
also can be used as a profit target the stochastic indicator is used as a filter for the trades
for this strategy you can use any suitable time frames for you and also you can use any currency
pairs we are going to use two indicators bollinger band with period period 20 and standard deviation
2 stochastic indicator with settings 13 5 5 take note to make this strategy even more profitable
you must be able to spot popular reversal candlestick patterns likes doji's inside
bars bearish and bullish haramus shotting star hammer etcetera this enhances your trade entry
trading strategy rules buying rules step number one price must be touching the lower bollinger
band line and may close below it too step number two look at the stochastic indicator
to see if the two lines are below 20 or oversold condition step number three then look at the
closing candlestick to identify if it's a good bullish reversal candlestick what you need to
look for a bullish reversal candlesticks like hammer inside bar or bullish harami formation
step number four once you see a suitable bullish reversal candlestick pattern place a by stop order
step number five place your stop loss 10-20 pips below the low of the bullish reversal
candlestick you have to make sure your stop loss is not to close otherwise you may get stopped out
prematurely selling rules for selling order do the exact opposite of the buy rules
step number one price must be touching the upper bollinger band line and may close below it too
step number two look at the stochastic indicator to see if the two lines are above 80 or overbought
condition step number three then look at the closing candlestick to identify if it's a good
bearish reversal candlestick step number four once you see a suitable bearish reversal candlestick
pattern place a sell order step number five place your stop loss 10-20 pips above the high of the
bearish reversal candlestick you have to make sure your stop loss is not to close otherwise
you may get stopped out prematurely take profit targets and options for take profit target options
here are a couple of ideas the middle bollinger band line can be used as your take
profit target when price reaches it you exit your profitable trade the middle bollinger band line
can also be used as a take profit target level one meaning can close half or whatever amount of your
trade when price reaches this and you keep the rest running until price reaches the take profit
target level 2 which would be the upper bollinger band line for by trade and lower bollinger
band line for a sell trade or you forget about the two options above and do this only aim to exit
your trade when price reaching the upper bollinger band line for by trade so when price touches
reaches this line you exit immediately you can do the opposite for a sell trade aim for the lower
bollinger band line and when price reaches it you exit with your profit immediately trade management
here's an idea move stop loss to break even when price touches the middle bollinger band line
but you need to be aware this may not be suitable on certain times because the price may be too
close and this may cause you to get stopped out only to find out later the price moves as expected
so at least try to keep 15 to 30 pips distance when move your stop loss to break even the
advantages of this trading strategy is that this is one forex trading strategy that can sometimes
pick top and bottoms which means you sell at the very top of a price swing and you buy at the very
bottom of a price swing if that happens your risk slash reward ratio of this trading strategy will
be very good and you can make a lot of profitable pips as a result you can further enhance this
strategy further by using price action trading by the use of reversal candlestick patterns
to time your trade entry as well thanks for watching hope you guys have enjoyed the video
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