Home / STRATEGY REVIEWS / Bollinger Brand Strategies (Part-1)
Bollinger Brand Strategies (Part-1)

Bollinger Brand Strategies (Part-1)

Bollinger Brand Strategies (Part-1)

 

Friends……. Thanks a lot for visit earnmoneyfx.com

This article earnmoneyfx.com research team try to cover one of the most uses indicators
various types entry exit strategy.

Let’s explore Bollinger Brand various types Entry Exit Strategy.

Before enter deep discussion about Bollinger Brand strategy, its important us to know
what is Bollinger Brand and How to calculate Bollinger Brand.

What is Bollinger Brand?

Bollinger Brand was developed by John Bollinger. Bollinger Brand® is a registered
trademark by John Bollinger.

Bollinger Brand is very simple. It has three parts. Upper Brand, Middle Brand and Lower
Brand.

Upper Brand and Lower Brand are volatility based brand. Volatility based on standard
deviation. By using standard deviation volatility increase and decrease. Usually standard
deviation 2 set in upper brand and lower brand.

When volatility increases the band automatically widen and when volatility decreases the
band automatically contract.

Middle Brand is 20 Simple Moving Average. Simple Moving Average use the standard
deviation formula thus 20 Simple Moving Average use Bollinger brand as a middle brand.

Calculation of Bollinger Brand:

 

* Middle Band = 20-day simple moving average (SMA)
* Upper Band = 20-day SMA + (20-day standard deviation of price x 2)

 

 

Please note, Bollinger Brand (20,2) is build in setup by Jhon Bollinger. But its not
mandatory to setup by build. You can change as your choice. But one thing you have to
know that most of trader setup Bollinger Brand as a build in thus its show buy or signal
similarly most of trader. If you want to change build in setup, at first you have to specialists
in Bollinger Brand strategies. Otherwise more chance to hit stop loss. It will be best if you
with crowd.

As per John Bollinger suggestion,

You can set standard deviation multiplier 2, where simple moving average is 20 and
standard deviation value is 20.

You can set standard deviation multiplier 2.1, where simple moving average is 50 and
standard deviation value is 50.

You can set standard deviation multiplier 1.9, where simple moving average is 10 and
standard deviation value is 10.

How to set up Bollinger Brand in Metatrader4:

Open Metatrader4 > Insert >Indicator > Trend > Bollinger Brand

Metatrader4 looks of Bollinger Brand as below

Image 1:

 

Bollinger Brand.

Various type Bollinger Brand Entry Exit strategy:

We can use various type entry exit strategy with Bollinger brand.

Earnmoneyfx.com research team suggest Bollinger Brand Entry Exit strategy as below,

1. Candlesticks Pattern with Bollinger Brand
2. Double Top Chart Pattern with Bollinger Brand
3. Double Bottom Chart Pattern with Bollinger Brand
4. Reversal or Counter Candlesticks with Bollinger Brand
5. Trend line Breakout with Bollinger Brand
6. Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand
7. 200 Simple Moving Average with Bollinger Brand
8. Walking with Bollinger Brand etc.

Are you ready to explore all…….!

Just wait a second. Below information is very very important if you want to trade with
Bollinger Brand entry exit strategy.

In Currency, Commodity and Stock market price can up and down for many
reason.

When price up and down aggressively then Bollinger Upper Brand and Bollinger
Lower Brand create distance too far.

When price up and down slowly with in a rang then Bollinger Upper Brand and
Bollinger Lower Brand come near each other which call SQUEZE.

Remember, When squeeze created there after great chance for BREAK OUT or
BREAK DOWN.

So we can idea about break out or break down by Bollinger Brand previously.

Let’s EXPLORE one by one ………

Candlesticks Pattern with Bollinger Brand:

Image 2:

Entry Exit Strategy with Candlesticks and Bollinger Brand

As above image point number – 1, we see price are DOWN TREND. Also price go down
with or close below Lower Bollinger Brand.

 

Image point number – 2, Pin bar candlesticks created in down trend. That means down
trend will end. But we don’t buy at this moment. We have to wait. If price want to complete
downtrend its must breakout middle brand of Bollinger brand.

Image point number – 3, YAH……. Price wants to complete downtrend. Its created
Bollinger Middle Brand break out candlesticks where price close above middle brand. Don’t
hurry, Till now we will not buy.

Image point number – 4, Side ways above middle brand that means bulls are still in
control. Though bears are trying to take control. It was BULL and BEAR fight time. Till now
we do not buy. We have to wait who will win…… BULL or BEAR. Also we draw trend line.

Image point number – 5, After fifteen candlesticks fight with bull and bear …….. Bulls are
win. Also its breakout trend line.

Image point number – 6, We put our BUY STOP order 2 pips above of the trend line
breakout candlesticks.

Image point number – 7, After hit BUY STOP order we place STOP LOSS 2 pips below of
trend line breakout candlesticks.

Image point number – 8, Candlesticks breakout Bollinger Upper Brand. Aggressive trader
entry here. Vice versa conservative trader buy image point number – 6.

Image point number – 9, Conservative or aggressive traders place their take profit level
on near swing high or 1 : 2 or 1 : 3 risk reward ratio.

Double Top Chart Pattern with Bollinger Brand:

Image 3:

Double Top with Bollinger Brand Entry Exit Strategy

Image point number – 1, We see strong uptrend of price with Bollinger Upper Brand and
swing.

Image point number – 2, First top are created. Few candlesticks try to break first top but
failure. When price cross below Bollinger Middle Brand then we sure that its first top.

Image point number – 3, There after a bottom has created which cross Bollinger Lower
Brand and failure to previous low. When price close above Bollinger Lower Brand and
Bollinger Middle Brand then we will assure about our bottom.

Image point number – 4, Now we are waiting for another top (First top higher or lower
whatever no matter). Here second top created. Though Bulls try to break this top but
failure.

 

Image point number – 5, There after price close below Bollinger Middle Brand which
confirm us that it’s second top.

Image point number – 6, Aggressive trader put their SELL STOP order 2 pips below of the
Bollinger Middle Brand breakout candlesticks.

Image point number – 7, After hit SELL STOP order aggressive trader place STOP LOSS 2
pips above of Bollinger Middle Brand breakout candlesticks.

Image point number – 8, Conservative trader put their SELL STOP order 2 pips below of
the bottom candlesticks for breakdown confirmation.

Image point number – 9, Conservative or aggressive place their take profit level on near
swing low or 1 : 2 or 1 : 3 risk reward ratio.

 

——- Thanks for give your valuable time to read this article ——–
(To be continued)

 

Check Also

Bollinger Brand Strategies (Part-8)

Bollinger Brand Strategies (Part-8)

Bollinger Brand Strategies (Part-8)     Friends……. A lot of thanks for visit earnmoneyfx.com As …

Leave a Reply

Your email address will not be published. Required fields are marked *