The Bollinger Band 4 Ways Forex Swing Trading Strategy
The Bollinger band indicator was developed by a guy called John Bollinger in the 80’s and is one of the most popular indicators for swing trading. This is generally used to measure the location of price in relation to recent movements. It is different from other indicators by taking volatility into consideration.
Bollinger Band Calculation:
The Middle Bollinger Band is simple a 20-period Simple Moving Average = Average of Last 20 Closing Prices The Upper Bollinger Band is calculated by adding 2 standard deviations to the Middle band = Middle Band + 2 x SD The Lower Bollinger Band is calculated by subtracting 2 standard deviations from the Middle band = Middle Band – 2 x SD
Standard deviation is a statistical indicator that measures the average deviation of each number in a sample from the average number. the higher the number, the more scattered the sample which means the higher the volatility of the currency pair. So from knowing how the Bollinger band is calculated, you can say that the more distant the upper and lower Bollinger bands are from each other, the higher the volatility of the market.
Method 1: Trading The Dynamic Support And Resistance Of Bollinger Band Lines
The upper and lower bands can be used as a support and resistance levels. When the price hits or touches the upper and lower bands and reverses, there’s a probability of a big move.
Method 2: Trading the Fixed Horizontal Resistance And Support Lines In Conjunction With Bollinger Band Lines
Look for the horizontal support and resistance level which coincides with price touching the upper and lower band. Make sure that the price has already reversed at least once on this support or resistance level. It will allow to have significance and making trade signal reliable.
Method 3: Trading The Breakouts Of Bollinger Bands
Watch for the price breaks through the upper and lower Bollinger band lines. Make sure the candlestick closes above the upper Bollinger band line. Then, buy ou just watches for the price to break through the upper or lower Bollinger band lines. Make sure the candlestick closes above the upper Bollinger band line before you buy or it closes below the lower Bollinger band line before you sell. This method will work on a trending market.
Method 4: Trading The Bollinger Band Squeeze
The price must be squeezing between the upper and lower band lines. In this case, the market is in low volatility. Just wait for the breakouts. The breakout can be upward or downward.
The Bollinger band indicator allows you to see this squeeze and capitalize on the breakout that happens afterward.
You can place 2 pending stop orders on both sides just outside the squeeze which will trigger when a breakout happens. Once one pending order is activated, cancel the other pending order.
Place stop loss on the other size of the squeeze or halfway point between the squeeze.
Another way to trade the Bollinger band squeeze is to allow the breakout to happen and then wait for the price to reverse to touch the middle Bollinger band line and enter an order when the price starts to head back in the breakout direction again.
How to install The Bollinger Band 4 Ways Forex Swing Trading Strategy?
Download The Bollinger Band 4 Ways Forex Swing Trading Strategy.zip
Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
Copy tpl file (Template) to your Metatrader Directory / templates /
Start or restart your Metatrader Client
Select Chart and Timeframe where you want to test your forex strategy
Right click on your trading chart and hover on “Template”
Move right to select The Bollinger Band 4 Ways Forex Swing Trading Strategy
You will see The Bollinger Band 4 Ways Forex Swing Trading Strategy is available on your Chart