Indicators come and go but for its sheer simplicity and reliability, the Bolinger band has stood the test of time. Ooopps, reliability? Well, there's no such thing like accuracy in forex. Then we have to go to the next best thing. Bolinger is so simple that many of us take it for granted. Bolinger band which is affectionately called "the BB" allows short-oriented traders and long-oriented traders alike to exploit the interplay between the lower and upper bands. This technique is actually originated from a book written by a well-known trader. Here is how the trade sets up with a long position example. (Reversed for the short side). It works wonderfully on larger timeframes.
1. Price enters the buy channel and closed strongly (not just pierce) above the 20 SMA.
2. Buy at 10 or 20 pips lower from the open price of the next opening candle.
3. Stop loss should be decided according to your own discretion.
4. TP depends on your risk appetite.
Good luck!! Any questions should be forwarded to annenaim81.
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