Bollinger Bands Montecarlo Trend Trading Strategy
Bollinger Bands Montecarlo Trend Trading Strategy is designed for assets with high volatility. It is based on the idea of using Bollinger Bands in combination with moving averages, which allows to determine short-term and medium-term price reversals.
Input parameters
- Currency pairs: assets with high volatility - GBP/JPY, GBP/NZD, CAD/JPY, AUD/JPY, EUR/NZD, stock indices, oil, gold, etc.
- Timeframe: M1 and above
- Bidding time: any
- Risk management: after calculating the stop-loss, choose this lot sizeto risk no more than 2-5% of the deposit per transaction
Used indicators
- Bollinger Bands (20, 1)
- Moving average (50, median)
- Moving average (13, median)
Setting up the price chart
- Unpack the archive
- Copy the template into the templates folder
- Copy the indicators to the folder MQL4 -> indicators
- Restarting the terminal
- Open the chart of the desired currency pair
- Install a template named BB Montecarlo
The schedule should look like this:
Determining the trend direction
The author of the strategy recommends opening positions only in the direction of the trend, which is defined as follows:
- upward trend - MA (50) crossed the middle line of the Bollinger Bands from bottom to top, MA (13) crossed MA (50) from top to bottom;
- downtrend - MA (50) crossed the middle line of the Bollinger Bands downwards, MA (13) crossed MA (50) upwards.
Signals indicating the opening of a long position
- there are signs of an uptrend;
- Buy position opens when the candle closes above the upper limit Bollinger Bands.
Signals indicating the opening of a short position
- there were signs of a downtrend;
- Sell position opens when the candle closes below the bottom of the Bollinger Bands.
Setting Stop Loss and Take Profit Orders
- stop loss is set above/below the opposite border of the Bollinger Bands;
- Take Profit is set depending on the asset and timeframe or at one of the pivot levels.
Recommendations of the author of the strategy
- If the Bollinger Bands or moving averages point horizontally, it indicates a sideways trend - most of the signals in the flat will be false.
- Note that the number of trading signals will be inversely proportional to the increase in timeframes - the higher the time interval, the fewer trading signals the strategy will generate.
- More advanced traders can experiment with replacing the moving averages with their more advanced modifications, in which the lag is minimized, which will increase the accuracy of inputs.
Before using Bollinger Bands Montecarlo trend trading strategy on a real deposit be sure to test it on demo account.
Download Bollinger Bands Montecarlo Strategy Template and Indicators
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The original definition of the trend direction, even very.