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: https://www.youtube.com/watch?v=TOpyYABl6wQThis 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
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.