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Bollinger Brand Strategies get profit (Part-4)

          

 

 

     Bollinger Brand Strategies  (Part-4)  

 

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earnmoneyfx.com research team suggest Bollinger Brand Entry Exit strategies 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.

 

 

Bollinger Brand Entry Exit Strategy (Part -1) we have discussed about Candlesticks Pattern with Bollinger Brand and Double Top Chart Pattern with Bollinger Brand.

 

Bollinger Brand Entry Exit Strategy (Part -2) we have discussed about Double Bottom Chart Pattern with Bollinger Brand and Reversal or Counter Candlesticks with Bollinger Brand.

Bollinger Brand Entry Exit Strategy (Part -3) we have discussed about Trend line Breakout with Bollinger Brand.

If you missed all or any one, Earnest request you to visit Bollinger Brand Entry Exit Strategy (Part -1), Bollinger Brand Entry Exit Strategy (Part -2) and Bollinger Brand Entry Exit Strategy (Part -3) in earnmoneyfx.com

These article earnmoneyfx.com research teams try to cover another strategy as below.

 

*** Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand ***        

Let’s explore ……….

 

Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand:

Before explore Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand at first we learn to know what is Simple Moving Average, What is Bollinger Middle Brand and what is swing trading.

 

 

 

What is Simple Moving Average?

Moving Average is various types. E.g.  Simple Moving Average (SMA), Exponential Moving Average (EMA), Smoothed Moving Average (SMMA) etc.

Simple Moving Average (SMA) is most uses of them because of its easy to calculate and understand.

 

Definition and Calculation of Simple Moving Average (SMA):

A simple moving average is formed by calculating the average price of a currency over a specific number of periods.

 

Most moving averages are based on closing prices; for example, a 5-day simple moving average is the five-day sum of closing prices divided by five.

As its name implies, a moving average is an average that moves.

Old data is dropped as new data becomes available, causing the average to move along the time scale.

The example below shows a 5-day moving average evolving over three days.

Daily Closing Prices: 11,12,13,14,15,16,17

 

First day of 5-day SMA: (11 + 12 + 13 + 14 + 15) / 5 = 13

 

Second day of 5-day SMA: (12 + 13 + 14 + 15 + 16) / 5 = 14

 

Third day of 5-day SMA: (13 + 14 + 15 + 16 + 17) / 5 = 15

 

The first day of the moving average simply covers the last five days.

The second day of the moving average drops the first data point (11) and adds the new data point (16).

The third day of the moving average continues by dropping the first data point (12) and adding the new data point (17).

In the example above, prices gradually increase from 11 to 17 over a total of seven days.

Notice that the moving average also rises from 13 to 15 over a three-day calculation period.

Also, notice that each moving average value is just below the last price. For example, the moving average for day one equals 13 and the last price is 15. Prices the prior four days were lower and this causes the moving average to lag.

For your kind information, Any moving average strategy is trend trading system.

Moving Average work well when price are up trend or down trend.

In choppy or sideways market moving average strategies are unable to well.

So we always avoid using moving average strategies when markets are choppy or sideways.

Other wise its chance to hit stop loss more and more.

Simple Moving Average is default indicator in Metatrader4 or Metatrader5.

Metatrader4 Simple Moving Average plot as below

 

 

Open Metatrader4 > Insert > Indicator > Trend > Moving Average> Simple > OK

What is Bollinger Middle Brand?

 

We know, 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)

* Lower Band = 20-day SMA – (20-day standard deviation of price x 2)

 

 

 

What is Swing Trading?

 

Price never goes up or down with straight.  Price always goes up or down with zigzag or swing.

In the Forex, Stock and Commodities market various types trader execute their trading. E.g. Position Trader, Breakout Trader, Momentum Trader, Swing Trader, Day Trader and scalper etc.

Swing Trading is short term trading where trader try to achieve profit with in short period by using price swing.

Swing trader basically use technical analysis to capture swing profit. Little time they add fundamental analysis for confluence.

Swing trader always likes to trade trending market. They always avoid sideways market.

Swing trader never investment for long term. They always invest for short term e.g. In daily chart five to ten days. They execute their buy sell in chart swing point.

Lets enjoy how to entry and exit Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand.

 

Image 1: Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand  Entry Exit Strategy with Breakout Structure.

 

 

 

Image point number – 1, We see market is fully sideways. As a swing trader we have nothing to do now. We have to wait for breakout sideways either up or down.

Image point number – 2, Candlesticks breakout sideways market. This time as a swing trader we have nothing to do now. We have to wait for price come back 20 SMA or Bollinger Middle Brand.

Image point number – 3, Candlesticks come back to 20 SMA or Bollinger Middle Brand. Now we have to wait for reversal candlesticks pattern which must close above 20 SMA or Bollinger Middle Brand.

Image point number – 4, Aggressive or conservative trader put their BUY STOP order 2 pips above of this reversal candlestick.

Image point number – 5, After hit BUY STOP order aggressive trader place STOP LOSS 2 pips below of reversal candlestick. Conservative trader place STOP LOSS 2 pips below of swing low.

Image point number – 6, Conservative or aggressive trader place their take profit level on near swing high or 1 : 2 or 1 : 3 risk reward ratio.

Image point number – 7, 8 and 9, Another swing trading entry and exit as per rules.

 

 

Image 2: Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand Entry Exit Strategy with Chart Pattern Structure.

 

 

Image point number – 1, We see market is fully uptrend. We have to wait for create any chart pattern.

Image point number – 2, Double top pattern created. But as a swing trader, we have nothing to do.

Image point number – 3, Candlesticks break down double top neck line. But as a swing trader, we do not entry here. Now we have to wait for price come back 20 SMA or Bollinger Middle Brand.

Image point number – 4, Candlesticks come back to 20 SMA or Bollinger Middle Brand. Now we have to wait for reversal candlesticks pattern which must close below 20 SMA or Bollinger Middle Brand.

Image point number – 5, Aggressive or conservative trader put their SELL STOP order 2 pips below of this reversal candlestick.

Image point number – 6, After hit SELL STOP order aggressive trader place STOP LOSS 2 pips above of reversal candlestick. Conservative trader place STOP LOSS 2 pips above of swing high.

Image point number – 7, Conservative or aggressive trader place their take profit level on near swing low or 1 : 2 or 1 : 3 risk reward ratio.

Image point number – 8 and 9, Another swing trading entry and exit as per rules.

 

Image 3: Swing Trading with Middle Brand (20 Simple Moving Average) Bollinger Brand Entry Exit Strategy with Candlesticks Pattern Structure.

 

 

 

Image point number – 1, We see market is fully uptrend. We have to wait for create any reversal candlesticks pattern.

Bearish Engulfing pattern created. But as a swing trader, we have nothing to do.

Image point number – 2, Candlesticks come back to 20 SMA or Bollinger Middle Brand. Now we have to wait for reversal candlesticks pattern which must close below 20 SMA or Bollinger Middle Brand.

Image point number – 3, Aggressive or conservative trader put their SELL STOP order 2 pips below of this reversal candlestick.

Image point number – 4, After hit SELL STOP order aggressive trader place STOP LOSS 2 pips above of reversal candlestick. Conservative trader place STOP LOSS 2 pips above of swing high.

Image point number – 5, Conservative or aggressive trader place their take profit level on near swing low or 1 : 2 or 1 : 3 risk reward ratio.

Image point number – 6, 7, 8, 9 and 10, Another swing trading entry and exit as per rules.

 

 

                  ——- Thanks for give your valuable time to read this article ——–

(To be continued)

 

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