Forex Tutorial
June 1, 2017

Bollinger Band for 5mins trading

Hi,

May I know anyone use bollinger band for trading???

What TF do you use? 1hour, 30M, 15M or 5M?

What other indicators you used in conjunction???

Regards

The first time I tried using it I had 10 winning trades in a row. So I know this method can work… although after that it was more unpredictable, it can be risky picking tops and bottoms in a ranging market because if the price breaks out of the range it can knock out all your little 2-5 pip profits in one trade. But if you can control your losses and know how to identify ideal ranging situations it can be pretty good.
another thing you do with that 5min system above is check the Bollinger Bands on other time frames as well, like the 30min and the hourly, to see if they confirm the trade.

I also bought mr Bollinger’s book “Bollinger on Bollinger Bands” but I haven’t read it yet. It seems like a simple and useful tool though.

Hi,

Thanks for the information, from what I understand the BB is good when the market is ranging. Therefore, when the market is trendy, this method may not work. What is your opinion??? What other indicators did you use besides the BB???

Thanks again for your information.

Regards

how can i know that ranging market has turned trending?

which indicator can i use

thank

Certain pairs tend to range more than others… EURUSD for example… in fact EURUSD is trading in a 10 pip range right now, this is an example situation. When it hits the bar at 1.3614 and starts to turn around, you sell and then exit at the middle band (conservative) or near the lower band (aggressive). Then try to do the same thing when it bounces off the lower band.

Pairs are also much more likely to enter a range during slow sessions, often in Asian and Australian sessions, sometimes end of US. Also sometimes after a big move the price will settle in a range for a while for the market to rest and determine its next direction.

I don’t think Bollinger bands are useless during trending market. You can’t really trade off them but they can give you a visual idea of trend direction and strength, they show you where most of the price action is going to be contained, and they also act as dynamic support and resistance lines.

I don’t really use any indicators other than Bollinger Bands. Fibs, support and resistance, and price action… and actually right now I don’t trade this way either, I am practicing the Linuxtroll rainbow which you can find in the Forex Discussion forum… this is a countertrend method and I am trying to learn to trade with the trend.

Hi, I used a similar method to scalp some time ago, (some times I still use it in the Sydney and Tokio sesion). What I recommend you to do: 

  1. Place a limit order some pips above/short – below/long the bollinger bands, if the price doesn’t hit the order be patient, maybe the next time will do. The number of pips depends on the pair, but I can say half of the spread you’ll pay it’s a good number.
  2. Close the position some pips before the price reach the oposite bollinger band.
  3. Avoid scalping when news concerning the pair are coming (1 hour or nearer).

And finally I think it’s the most important point, identify the main trend, open a chart of 1 hour and other of 4 hours, the price usually ranges but in one direction, at least slightly, so, if you see the martket is ranging in bullish direction, place only the long orders, and if the market is bearish place only the short orders.

Try it on a demo before go real, it requires practice and knowledge of the typical movements of the pair, try to stick just to one or two pairs so you really notice how they are used to move.

Hope this helps, good luck

I’ve been using BBands for a couple of months now. The key to being able to make it through the ranging times is to trade with longer length to your band.

In the 5 min I’m currently using 285 length with a deviation of 1. I’ve found this to be very profitable. I’ve not tested it on other pairs, but this pair has been good to me.

The longer your length the more true your trades will run at least to a certain extent. The basic 20 with a deviation of 2 can or might hurt your account in the long run.

Just my 2 cents.

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When using the BB on GBPJPY the shorter the timeframe the greater your chance of getting hurt in a ranging market. I’ve been thoroughly testing the bb to see what is the best parameters for the GJ and found 285 length for the 5M to best the most optimal settings.

As for the entry and exit strategy. You can use the outer boundries of your bb as entry and exit.

ex. Upper bb is at 239.00 and lower is at 238.50. When the current price goes through the lower band @ 238.50 you take out a sell. After taking out a sell place youi stop and a buy stop at the upper band line and keep adjusting them as the bb moves. The same is also true with the upper band.

When it moves back north through the upper band you will have adjusted your sl and buy stop to the last point of the bb and the process will start over. Now you will have a buy with a sell stop at the lower band which will be adjusted accordingly until it goes through the lower band and starts over again.

As for the deviation of 1, I chose this because I wanted a tighter spread between the upper and lower bands. Which results in a smaller sl and reverse, leaving me with a smaller loss potential. * Basically I wanted a deviation of 2 with smaller loss potential. So I compensated by stretching the length of the band, which results in the equivelent of deviation of 2 for a smaller length with the smaller loss potential. Also you will notice as you lengthen your bb you will be able to go through the ranging times better and still take advantage of the trends.

It generally takes about 12-14 hours for a transition to complete itself. Sometimes it takes longer. I’ve personally seen up to 5 days for it to settle out.

I’ve tried the bb on other pairs and found the GJ to be the best as it has been trending a lot more than other pairs this year.

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