Those who are familiar with the indicators know the use of the Bollinger band indicator. Many traders in Singapore are using the Bollinger band trading strategy to secure quality trades. Things might sound simple at the starting but once you start to lose money, you will say, the Bollinger band tool doesn’t work. Some of you might blame this market is manipulated by the big players. But this article is going to change your life. With some minor tweaks, you can make a huge leap of progress while using the Bollinger band indicator.
Use it in the daily time frame only
Every indicator is designed with a specific purpose. For instance, fractals tend to give accurate signals in the minute 1 and minute 5-time frame. If you use them in the daily time frame, you will have to adjust the readings by using other variables. Just like this, the Bollinger band indicator tends to generate perfect setups in the daily time frame. If you start using it in the lower time frame, you will notice the price is penetrating the dynamic support and the band is expanding more. You will never know the downfall will stop.
To understand the Bollinger band, we have to know how this tool works. The upper band and the lower band is nothing but complex calculations of the moving average. It gives the sweet trading spot to the traders and helps them to make a profit. Find the support and resistance level in the trading platform and load the Bollinger band indicator. If the dynamic levels match the static support and resistance zone, you have a good chance to make a profit from that particular place. Use your intellect to improvise your strategy to make decent progress.
Trade with the trend
The naïve investors in Australia are always trading the upper and low band. In short, the sell at the upper band and buy in the lower band. Such a strategy works like charm when the mark is range-bound. But nothing in the Forex world stays range-bound forever. Expecting the trending movement is better as it will reduce the risk. Identify the long term market trend first. Let’s say, you are analyzing the USDSGD pair. In the weekly and monthly chart, it’s prominent the sellers are dominating the market. So, instead of shorting the USDSGD pair at the dynamic resistance, look for buying opportunity. Taking such an intelligent decision can greatly improve your results in trading.
Focus on the ADX curve
If you intend to use the Bollinger band like the pro, you have to take the help of the ADX indicator. This indicator helps you identify the potential reversal zone. Instead of using it to find the reversal, you will use it to trace the endpoint of retracement. If the endpoint of the retracement coincides with the Bollinger band dynamic level, placing the trade will be justified. Those who don’t know how to use the ADX indicator have nothing to worry about. There are two basic curves that you need to analyze. If the +DI curve cross above the –DI curve consider it as the end of a bullish move. On the contrary, when the +DI curve cross below the –DI curve, you can expect the bears have lost control of the market. Based on this simple concept and using the Bollinger band level, you can make a perfect strategy.
The trading strategy defines your personality. If you use a complex system, you are don’t know how to take things naturally. You have very bad management skills. The experts always execute orders in a clean chart and they never rely on the indicators only. They rely on the core price movement as it gives accurate information regarding the buyers and sellers. So, start analyzing the market like an expert.