Bollinger Band With Horizontal Support And Resistance Forex Trading Strategy

The Bollinger Band With Horizontal Support And Resistance  Forex Trading Strategy is another trading technique that uses the bollinger band with horizontal support and resistance levels.

Timeframe: 1hr or 4hr ideally.

Currency Pairs: Any

Forex Indicator: Bollinger band with default settings

 

With this forex trading system, what you are looking for is a:

  • horizontal support or resistance level with coincides with price touching the upper or lower bollinger bands on this level.
  • the next thing you also look for also is to check that price has at least reacted twice to this support or resistance level.

See the chart below to make this trading concept a little bit more clearer for you:

Bollinger Band With Horizontal Support And Resistance Forex Trading Strategy

 

TRADING RULES

Sell Setup:

  1. Look for a confirmed support zone/level which has already been broken and at least price has reacted twice to it and now this former support area is going to act as a resistance level.
  2. Then wait for price to get back up to touch the upper bollinger band line which should almost be in the same level (or zone) as the previously broken support level.
  3. Place a pending sell stop order 2-3 pips under the low of the candlestick that touches the upper bollinger band line in this area.
  4. Place your stop loss at least 5 pips above the high of that candlestick.
  5. Take profit when price goes down to the middle bollinger band line. Or you can wait until price reaches the lower bollinger band line and take profit.

 

Buy Setup:

  1. Look for a confirmed resistance zone/level which has already been broken and at least price has reacted twice to it and now this former resistance area is going to act as a support level.
  2. Then wait for price to get back down to touch the lower bollinger band line which should almost be in the same level (or zone) as the previously broken resistance level.
  3. Place a pending buy stop order 2-3 pips above the high of the candlestick that touches the lower bollinger band line in this area.
  4. Place your stop loss at least 5 pips below the low of that candlestick.
  5. Take profit when price goes up to the middle bollinger band line. Or you can wait until price reaches the upper bollinger band line and take profit.
READ  Bollinger Band Forex Trading Strategy Using Dynamic Support And Resistance

 

REVERSAL CANDLESTICKS FOR TRADE ENTRY CONFIRMATION

You can also use reversal candlesticks as trade entry confirmation with this forex trading system.

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