Forex indicators: Bollinger Bands, Relative Strength Index RSI 14 period, Stochastic (5,3,3)
Time Frame: 30 minutes, 1 Hour, D1
Trading rules
- Make channel line above and below market price
- Place buy stop or sell stop order position with 20 pips distance from above / below channel
- In the D1 time frame analysis example, we saw that market price inside the channel, as you can see in the below image. In this situation we can only place stop order inside the Bollinger bands channel.
In the trading example above we can clearly see the channel inside the Bollinger bands indicator.
Place your stop loss based on risk and reward ratio.
The main problem when we are opening a trading position is placing a stop loss order. When the market price near to the market price channel line and you do not have confidence that the market price will break it, we can reanalyze our trading position and change the stop loss order on break even.
Open a trading position when the Bollinger bands indicator channel broken, you can open a trading position in the direction of the market trend.
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