Bollinger Bands in PFOREX Assist - Trading Signals & Market Analysis

Bollinger Bands in PFOREX Assist

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Bollinger Bands in PFOREX Assist

Eighty eighth session - PFOREX Assist Tutorial

Welcome back to Forex professional training.

In this session we will review;

  • The Bollinger Bands specifications and strategies
  • The Bollinger Bands examples in PFOREX Assist

Bollinger Bands Strategy

Bollinger Bands indicator is a well-known trading tool with simple structure and high performance. This indicator has one Middle line, called Middle Band and two outer Bands. The Middle Band is a moving average line of 20 periods.

The trading signals from Bollinger Bands are categorized into two groups;

  • Middle Line
  • Band Cross

The confirmations from RSI, Stochastic and powerful reversal candlestick patterns are applied for higher success rate.

Bollinger Bands in PFOREX Assist - Signals & Analysis

Middle Line

When price bounces back toward Middle Line, then price may change the direction on the reversal spot near Middle line on which other confirmations shows the probable reversal trend.

The specifications of this strategy are as follows;

  • Market type: Trend market
  • Symbols: Entire symbols
  • Time-frames: All timeframes
  • Elements: Bollinger Bands, Candlestick, RSI & Stochastic
  • Entry Price:
    • Buy Order: Reversal spot near Middle Line
    • Sell Order: Reversal spot near Middle Line
  • Stop Loss:
    • Buy Order: Below the last candlestick on the reversal spot
    • Sell Order: Over the last candlestick on the reversal spot
  • Take Profit:
    • Buy Order: Equal to length of the candlestick, over the entry price
    • Sell Oder: Equal to length of the candlestick, below the entry price
  • Confirmations: Hidden Divergence, Fibonacci levels and powerful reversal candlestick pattern

Now let’s check some examples of this strategy.

On the GBPJPY symbol in H4 time-frame, after price has increased, it returned toward the Middle Line where the Oversold condition is confirmed by both RSI & Stochastic. Then the oversold Levels are crossed toward top to show the reversal spot near the Middle Line. The generated signal will become active after price goes higher than the High Price of last Candlestick on the reversal spot.

Bollinger Bands in PFOREX Assist - Middle Line - Bullish

On the next example, price has decreased and then returned toward the Middle line. The overbought condition as well as the Dark Cloud candlestick near the Middle line show a powerful reversal spot.

The signals from this strategy with lower time-frames and more confirmations are suitable for options trades

Bollinger Bands in PFOREX Assist - Middle Line - Bearish

Band Cross

When price crosses the Band toward outside of the channel and then returns inside the Band again, if it bounces back toward that certain Band without crossing it then a reversal spot can be detected with confirmation by Divergence/Convergence.

The specifications of this strategy are as follows;

  • Market type: Trend market
  • Symbols: Entire symbols
  • Time-frames: All timeframes
  • Elements: Bollinger Bands, Candlestick, RSI & Stochastic
  • Entry Price:
    • Buy Order: Reversal spot over the Lower Band
    • Sell Order: Reversal spot below the Lower Band
  • Stop Loss:
    • Buy Order: Below the last candlestick on the reversal spot
    • Sell Order: Over the last candlestick on the reversal spot
  • Take Profit:
    • Buy Order: Equal to length of the candlestick, over the entry price
    • Sell Oder: Equal to length of the candlestick, below the entry price
  • Confirmations: Hidden Divergence, Fibonacci levels

Now let’s check some examples of this strategy.

On EURJPY, price has decreased below the lower band and then returned inside the bands channel. Price decreased again towards the Lower band but it could not cross it. The last valley is lower than the previous valley that was formed lower than Lower Band, hence by the help of RSI or Stochastic, a convergence is detected. Crossing the Overbought Level by the RSI or Stochastic line toward top confirms the bullish signal.

Bollinger Bands in PFOREX Assist - Band Cross - Bullish

The next example shows bearish signal from this strategy. After price proceeded toward the peak over the upper Band, it bounced back inside the Bands channel. After it increased again, a reversal spot appeared below the upper Band where both RSI and Stochastic show bearish trend. It is speculated that signal will become active after the Entry Price is crossed toward bottom.

Bollinger Bands in PFOREX Assist - Band Cross - Bearish

Notices

You can download PFOREX Assist app for iOS and other platforms devices to receive these signals instantly, however I have to insist that all the services provided PFOREX are as information, not as suggestion nor advice.

That concludes this session, until next time and another session, take care.

Linkages & Notices

You can also view the video of this session available on the PFOREX Financial Video tutorials.

You can also find the video of this session on PFOREX YouTube Channel.

PFOREX Assist app provides BEST & FREE trading signals and market analysis. PFOREX Assist is available on App Store (iOS version) & Play Store (Android version).

The PDF file of this session is also available.


PFOREX Educational materials in text and video formats are developed by PFOREX Department of Education to enhance and improve investors’ knowledge and trading skills. Due to high risks and volatile fluctuations in financial markets, traders and investors must develop their trading skills and knowledge. It is strongly recommended to apply Risk and Capital Management when trading in financial market.

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