Don't worry, I'm not about to go on a history lesson on cryptocurrencies with details of where David Chaum went to college. The psychological warfare of the highs and the lows become unmanageable. The idea, using daily charts, is that when the indicator reaches its lowest level in 6 months, you can expect the volatility to increase. It immediately reversed, and all the breakout traders were head faked.
Bollinger Bands and RSi
Often after the Bollinger bands have contracted price breaks out with a sharp move. If you are quick and get your stop to breakeven you can look to exit this trade somewhere between one or two times the risk distance between your entry and initial stoploss. Ideally, if you risked 10 points you want to be taking between 10 and 20 points profit from a trade. If the move has been sharp you may want to try and lock in some profits, as often it can retrace quickly.
Start moving your stoploss up from breakeven or from the middle Bollinger and trail it underneath the low of every candle that closes up. The next highlighted area on the above chart shows a sell trade. Once again you are looking for the lower Bollinger band and the middle Bollinger average to push below the exponential moving average.
Then you are looking for a candle that closes down, and the entry is triggered when the low of this candle is broken. Your stoploss is placed at either the last small high in the price, or at the middle Bollinger level, or at your maximum you are willing to risk on the trade. Bear in mind you want to keep the risk as small as possible on these trades to make this work.
Once the price has moved down towards touching the lower Bollinger band you need to get your stop quickly to breakeven. Then either start to trail it down locking in your profit, or closing the trade between one or two times your risk.
As the price starts to push down to the lower Bollinger band you get your stop quickly to the breakeven level. At worst you should have been stopped out at breakeven. Because the last low is quite far away I would suggest placing your stoploss at the middle Bollinger average as the price starts to break in your trade direction.
The price quickly moves towards your upper Bollinger band and at this point is around 1. Here you can either close out for a profit, or trail your stoploss under the low of each one minute candle until the price reverses and closes the trade.
You might get another few points reward doing this. You will notice on the chart above that price continued up after the first trade. When you are first learning this system I would suggest you only take the first trade in any new direction. As you become more aware of how this system behaves, you might want to use the same entry and exit techniques to trade continuations of the trend.
If it is a strong move and the price is above the middle Bollinger, every consequent touch of the outer Bollinger bands can lead to a profitable move which fits with your risk. I would suggest you set up a chart with the indicators as shown. Leave it open on your desktop and follow the idea visually for a few days.
Even without placing a trade you can get a feel for how this works, and you will see where the opportunities are when the price touches the extremes at the Bollinger bands. There are tools available for certain broker trading platforms such as Interactive Brokers which will help manage your stoploss is and exit points for you. You can set them up to complete tasks, such as move your stoploss 2 points, by clicking the software once to perform the action.
They can also enter a trade and automatically place a stoploss at your maximum risk level at the same time. Tools like this are invaluable when trading such a fast-moving system. This is software which records any actions you make on your PC browser and saves them as scripts.
For instance you could have one set up which places a trade and your maximum stoploss with one click, then you could have another set up which moves your stoploss by X amounts of points each time you click, and another which closes your position. Fast-moving trading systems need some sort of automation to help manage positions. Carl is an active trader of forex, stocks and commodities who mainly uses charting and candlestick strategies. Bollinger Bands 1 min Scalping is a method for trade on 1 minute charts.
This is a trend following forex strategy. Standard Bollingr Bands 20, 2 ;. For long entry position the upper Bollinger Band and the middle band 20 SMA of the Bollinger band must be above the EMA exponential moving average , but for a best signal buy when all three.
Do not entry when the price broken the upper band but wait for the price retraces on the middle band and bounce. For short entry position the upper Bollinger Band and the middle band 20 SMA of the Bollinger band must be below the EMA exponential moving average , but for a best signal sell when all three.
Do not entry when the price broken the lower band but wait for the price retraces on the middle band and bounce. Initial stop loss three options: After move stop loss wiht trailing stop.
Take profits 2 options: Small profits predetermined 5 -8 pips depends by currency pairs. Bollinger Bands 1 min Scalping in action.