Bollinger Band Overbought/Oversold Trend Trading Strategy

Bollinger Band Overbought/Oversold Trend Trading Strategy is designed to trade on a rebound from one of the boundaries Bollinger Bands with confirmation of the signal by Stochastic.

Input parameters

• Currency pairs: any.
• Timeframe: M30 and higher.
• Bidding time: any.
• Risk Management: After calculating the stop-loss, choose such a volume of the lot that the risk was no more than 2-5% of the deposit per trade.

Used indicators

• Bollinger Bands (20 periods, 2 Standard deviation);
• Moving average smoothed (34);
• Stochastic indicator (5,3,3)

Installing the system template

1. Unpack the archive with templates and indicators.
2. Copy the template into the templates folder.
3. Open the chart of the desired currency pair.
4. Set the template with the name Bollinger Bands Overbought Oversold.

The schedule should look like this:

Signals indicating the opening of a long position (buying)

1. The price is above the blue moving average (the trend is upward).
2. The price rebounded from the lower boundary of the Bollinger Band.
3. Stochastic is in the oversold zone.
4. A stop loss is placed under the nearest local minimum.

Signals indicating the opening of a short position (sale)

1. The price is below the blue moving average (trend is downward).
2. The price rebounded from the upper boundary of the Bollinger Band.
3. Stochastic is in the overbought zone.
4. Stop Loss is put over the nearest local maximum.

Note that the rules of the trade Bollinger Band Overbought/Oversold trend trading strategy are quite simple and straightforward, which makes trading easier for beginners. Traders with more extensive experience can increase the effectiveness of the trading strategy by replacing standard indicators with more advanced modifications.

Download Template

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