30 Minute Bollinger Band Strategy – Easy to Understand for Beginners!

OkaneOkane Posts: 1,279 admin
edited March 2015 in Binary Options Strategy
30 Minute Bollinger Band Strategy – Easy to Understand for Beginners!

This strategy focuses on Bollinger Bands and Relative Strength Index.
The idea is to identify a trend and then use the RSI to pinpoint overbought or
oversold areas. An optional indicator can be added but I recommend that you
start drawing support and resistance lines for further accuracy.

See the video here:

This is how it works:
Set the time frame to M30
I prefer volatile currency pairs, like USD/JPY, EUR/JPY or GBP/USD.

Add Bollinger Bands Period 50 Deviations 2, Shift 0:
We use the middle band of the Bollinger band to identify the trend on the M30.
At or above the middle band means uptrend but confirm it is a higher low.
At or below the middle band means downtrend but confirm it is a lower high.

Add Relative Strength Index period 4 and levels 75 and 25:
Uptrend: Use the level 25 as an indication for identifying that the higher low is a valid oversold
position.
Downtrend: Use the level 75 as an indication for identifying that the lower high is a valid overbought
position.

More info: The Bollinger Band is a great tool for understanding when the trend is about to change direction! Normally, the bands get squeezed together and the price remains in a tight range before “exploding” into a certain direction. You can see a few similar situations in the video at around 3:00 minute after the two put option positions. Notice how bands get close to each other and then the price changes direction and goes up.

**Ask your questions and ideas down below and please feel free to share with me how it works out for you! If you are using a third confirmation “tool” let me know what works for you.


Comments

  • loislaneloislane Posts: 11
    okane I have a question pls which is better in the text above you have rsi here for period 7 and in the video you have set rsi for period 4 ??????????????????????? so can this be used for ranging market or for only if markets are trending Many thanks lois lane
  • OkaneOkane Posts: 1,279 admin
    loislane said:

    okane I have a question pls which is better in the text above you have rsi here for period 7 and in the video you have set rsi for period 4 ??????????????????????? so can this be used for ranging market or for only if markets are trending Many thanks lois lane

    Sorry! My mistake. RSI 4 works well. You can use RSI 7 if you want,
    it gives you lesser signals but has a higher accuracy.
    You can do a test like this;
    First, add RSI 4 and then in the same RSI window you can add another one but
    period 7. It should look like this (read the info on the screenshot please):
    bbandstrategyRSI.jpg
    1199 x 848 - 229K
  • unknownunknown Posts: 24
    Thanks! Im going to back test this on forextester. Is there any other pairs that this is good for?
  • OkaneOkane Posts: 1,279 admin
    unknown said:

    Thanks! Im going to back test this on forextester. Is there any other pairs that this is good for?

    No problem. Sure, I think most volatile pairs are good. I mean major currency pairs
    like EUR/USD, GBP/USD, EUR/JPY, USD/JPY even NZD/USD. Do some tests first like you said on your favorite pair.

  • charbel20charbel20 Posts: 1
    Okane said:

    loislane said:

    okane I have a question pls which is better in the text above you have rsi here for period 7 and in the video you have set rsi for period 4 ??????????????????????? so can this be used for ranging market or for only if markets are trending Many thanks lois lane

    Sorry! My mistake. RSI 4 works well. You can use RSI 7 if you want,
    it gives you lesser signals but has a higher accuracy.
    You can do a test like this;
    First, add RSI 4 and then in the same RSI window you can add another one but
    period 7. It should look like this (read the info on the screenshot please):
    Hello Okane

    this strategy its applicable on 5 min charts with same value for indicators
  • OkaneOkane Posts: 1,279 admin
    Hey, sorry for the late response. As I always say, you need to check all timeframes and not only focus on
    one timeframe. Check some of my other videos as well on how to analyze the charts and I hope it will get
    somewhat easier to understand!
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