Flat strategy based on Bollinger Bands
Flat trading strategy for the Bollinger Bands indicator is designed to trade on the H1 time frame, the currency pair - any. The following indicators, standard for the trading terminal Metatrader 4, should be installed on the chart of the selected currency pair:
1) Bollinger Bands indicator (perion - 24, deviation - 2, HLCC/4) - the color blue, indicates the trend on the 24-hour timeframe, i.e. daily.
2) Bollinger Bands indicator (period - 120, deviation - 2, HLCC/4) - the color is red, it indicates a trend on the 120-hour timeframe, i.e. weekly.
3) Bollinger Bands indicator (period - 480, deviation - 2 HLCC/4) - color orange, indicates a trend on the 480-hour chart, i.e. on the monthly chart.
4) Simple Moving Average - SMA (4), apply to close.
5) Simple Moving Average - SMA (8), apply to close.
Here is approximately how your chart will look like after you install all the indicators (for convenience, you can use the template for MT4, which you can download at the end of this article):
Trading signals for a flat strategy based on Bollinger Bands
To enter the market, it is necessary to check any of these three Bollinger's for "the presence of Flat: if at least one of them is narrowed and its lines are parallel, you should consider this currency pair to look for signals for making deals. If there are no parallel lines, switch to another currency pair.
Then we determine whether the price is now at the lower boundary of the parallel Bollinger Bands or at the upper boundary of the indicator. If the price, for example, came to the upper border of the BB bands and bounced from them and this signal is confirmed by crossing the moving averages SMA (4) and SMA (8), it is necessary to conclude a sell trade at the opening of the next hourly candle. If the price came to the lower boundary of the BB bands and bounced up from them and this signal is confirmed by the crossing of the SMA (4) and the SMA (8), it should be a buy trade.
StopLoss place above the maximum price after the rebound from the BB - to sell, and below the minimum price after the rebound from the BB to buy.
Closing the deal after the reverse intersection of the two SMA simple moving averages, or on the opposite border, or on the middle line of the BB bands of an older period. I.e. for indicator BB (24) target - BB(120)For the BB (120), the target is the opposite border or the middle line of the BB (480).
Example of working out a flat trading strategy based on Bollinger Bands
