B bands pattern foreign currency trading technique

B-Bands The trend trading strategy is a trend-based strategy in which retracements are traded. It's a simple strategy that traders can use to easily identify the medium-term trend direction and take advantage of the dynamics of the trend during the retracement.

The B-bands stop the BO display

The B-Bands Stop BO indicator is a custom indicator that behaves similarly to the SAR indicator. Depending on the direction of the trend, points are displayed on the graph.

The B-band stop indicator is usually used as the basis for placing stop losses, hence the “stop” indicated on the name of the indicator. This indicator tries to identify the direction of the trend and then marks the points accordingly. If the trend is bullish, the dots are placed well below the candlesticks. If the trend is bullish, the dots are placed above the candlesticks. The stop losses are then placed slightly below or above the points. The idea behind this is that price shouldn't touch the lines as long as the trend stays the same.

Stochastic oscillators

The stochastic oscillator is a staple among traders. Probably all trading platforms and charting tools available today have the stochastic oscillator built in. The MT4 platform is no exception.

While the stochastic oscillator is a generic indicator and not a custom indicator, this should not detract from its usefulness. It is an effective tool that has its place in many profitable trading strategies.

The stochastic oscillator is a limited oscillating indicator with a range from zero to 100 and a center line at 50. It consists of two lines, a fast and a slow line. These two lines cross within the area. Every time these two lines cross it can be considered an input signal. However, some signals are better than others.

Since the stochastic oscillator is limited, an overbought and oversold line can also be marked in its area. This would typically be 20 and 80 or 25 and 75. If the lines drop below 25, the market is said to be oversold and could be pressured to reverse to the mean. On the other hand, if the lines go above 75 the market could be considered overbought and reverse to the mean. Crossovers around these levels could be seen as a high probability as the price usually tends to return to its mean.

Trading strategy concept

The idea behind this strategy is to use the B-bands stop BO indicator as the basis for the trend. If the points are below price then we should look for buy trade setups. On the other hand, if the points are above price we would only take sell trade setups.

After identifying the medium-term trend direction using the B-bands stop BO indicator, we wait for the price to decline, resulting in a short-term oversold or overbought condition using the stochastic oscillator. The stochastic oscillator parameters would be set to "5, 3, 3" to enable a fast stochastic oscillator. This would enable us to identify oversold and overbought conditions in the short term. Signals under these market conditions would be our entry point.

Indicators:

  • BBands_Stop_BO
  • Stochastic oscillator
    • % K period: 5th
    • % D period: 3rd
    • Slowdown: 3

Time window: 5-minute, 15-minute, 30-minute, 1-hour, 4-hour, and daily charts

Currency pair: all major and minor pairs plus some crosses; Stick with pairs with sufficient volatility when trading on the day

Trading session: any; Trading on London and New York meeting when day trading

Buy (Long) Trade Setup

entry

  • The price should be below the B Bands Stop BO indicator, which indicates that the medium-term trend is bullish
  • Wait for the price to go down
  • Wait for the stochastic oscillators to drop below 25 during the retracement, which is a short-term indication of an oversold market
  • Enter a buy market order when the fast stochastic line crosses the slow stochastic line below the 25 mark

Stop loss

  • Set the stop loss a little below the entry candle

Take profit

  • Set the take profit target to be twice the risk of the stop loss

B Bands Trend Forex Trading Strategy 1 "width =" 936 "height =" 556 "srcset =" https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading - Strategy-1.png 936w, https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-1-300x178.png 300w, https: / / www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-1-768x456.png 768w "sizes =" (maximum width: 936px) 100vw, 936px

B Bands Trend Forex Trading Strategy 2 "width =" 936 "height =" 556 "srcset =" https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading - Strategy-2.png 936w, https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-2-300x178.png 300w, https: / / www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-2-768x456.png 768w "sizes =" (maximum width: 936px) 100vw, 936px

Sell ​​(Short) Trade Setup

entry

  • The price should be above the B Bands Stop BO indicator, which indicates that the medium term trend is bearish
  • Wait for the price to go down
  • Wait for the stochastic oscillators to go above 75 during the retracement, indicating that the market is overbought in the short term
  • Enter a sell market order when the fast stochastic line falls below the slow stochastic line above the 75 mark

Stop loss

  • Set the stop loss a little above the entry candle

Take profit

  • Set the take profit target to be twice the risk of the stop loss

B Bands Trend Forex Trading Strategy 3 "width =" 936 "height =" 556 "srcset =" https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading - Strategy-3.png 936w, https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-3-300x178.png 300w, https: / / www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-3-768x456.png 768w "sizes =" (maximum width: 936px) 100vw, 936px

B Bands Trend Forex Trading Strategy 4 "width =" 936 "height =" 556 "srcset =" https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading - Strategy-4.png 936w, https://www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-4-300x178.png 300w, https: / / www.forexmt4indicators.com/wp-content/uploads/2020/09/B-Bands-Trend-Forex-Trading-Strategy-4-768x456.png 768w "sizes =" (maximum width: 936px) 100vw, 936px

Conclusion

This strategy is an aggressive trend trading strategy. This aggressive property is mainly due to the tight stop loss that normally occurs as the signals on the stochastic oscillator are usually fractals as well. This enables a particularly aggressive strategy that enables a reward-to-risk ratio of 2: 1. This could be set even higher depending on the trader's risk appetite. The larger the preset reward-to-risk ratio, the higher the likely win, but the likelihood of reaching the take profit target may be higher.

If you followed the trading examples above, most trades would have enough room to make a higher target profit.

Another option is to set the stop loss a little further away from the candle holder. Although the stochastic oscillator has already given a valid entry signal, the momentum behind the retracement could at times push the price a little further before it moves in the direction of trade and reaches a tight stop loss prematurely. If you place the stop loss a little further from the candle, the trading setup has some leeway in this case. However, the reward-risk ratio could be a little lower. The key is to have the stop loss the correct distance and set the take profit target at a logical distance that the price would likely hit.


Forex Trading Strategy Installation Instructions

The B-band trending forex trading strategy is a combination of Metatrader 4 (MT4) indicator (s) and template.

The essence of this forex strategy is to transform the accumulated history data and trading signals.

The B-band trending forex trading strategy provides the ability to spot various peculiarities and patterns in price dynamics that are invisible to the naked eye.

Based on this information, traders can assume further price movements and adjust this strategy accordingly.

Recommended Forex Metatrader 4 trading platform

  • Free $ 30 to start trading right away
  • 2nd deposit bonus up to $ 5,000
  • Unlimited loyalty program
  • Award winning forex broker

xm account opening help "width =" 1160 "height =" 544

Click here for the step by step XM Trading Account Opening Guide

How do I install the B Bands Trend Forex Trading Strategy?

  • Download B Bands Trend Forex Trading Strategy.zip
  • * Copy mq4 and ex4 files to your Metatrader directory / Experts / Indicators /
  • Copy the tpl file (template) into your Metatrader directory / templates /
  • Start or restart your Metatrader client
  • Select the chart and timeframe in which you want to test your forex strategy
  • Right click on your trading chart and hover over “Template”.
  • Move right to select the B-band trending forex trading strategy
  • You will see that the B-band trending forex trading strategy is available on your chart

* Note: Not all forex strategies come with mq4 / ex4 files. Some templates are already built into the MT4 indicators of the MetaTrader platform.

Click below to download:

save up

save up

Get download access

Leave a Reply

Your email address will not be published. Required fields are marked *

Get more stuff like this
in your inbox

Subscribe to our mailing list and get interesting stuff and updates to your email inbox.

Thank you for subscribing.

Something went wrong.