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Bollinger Band and Stochastic

Bollinger Band and Stochastic

Posted by bynaryost at Dec 4, 2017

There is an opinion that turbo options with a duration of 3-5 minutes are practically not amenable to technical analysis and this has its own logic: in such small intervals, in most cases, "market noise" is traded and it seems that it is impossible to predict the result. But, as practice shows, in any chaos, there is also a hidden order and patterns that can identify adaptive strategies as in vfxAlert, which can be used as confirmation signals of technical analysis.

Characteristics of the strategy

  • Type: scalping;
  • Charts period: 30 second - 60 seconds;
  • Currency pairs: any with high intraday volatility;
  • Trading period: the whole trading day Forex


How to trade


Adjust indicators in your trading system:

Bolinger Bands (BB)

  • Period = 14
  • Standard deviation = 2
  • Period %K = 13;
  • Period %D = 13;
  • Smoothing = 3;

Signal conditions:

  • CALL: Candle crosses the middle of BB line from the bottom to up and stochastic is above the overbought zone (level 20) and stochastic goes up.
  • PUT:  Candle crosses the middle of BB line from the up to bottom stochastic is below the oversold zone (level 80) and stochastic goes down.

How to open the position

The optimal entry point is the first candle after crossing the middle Bollinger.

Expiration time

Not less than 3-5 candles working timeframe.

Some bits of advice

  • Begin trading on the demo account. Despite the fact that psychologically trading on a real account is different from the demo. You need to start trading on a virtual account.
  • You should always wait for Stochastic will be out from overbought and oversold zones. On strong market movements, the indicator can "stick" for a long time in its extreme zones.
  • If there is a  long-term trend, you can open additional options on large timeframes using signals of the vfxAlert adaptive algorithm: M5 and M15. The indicators settings are the same.

Bollinger bands

Graphically, Bollinger Bands are two lines that limit the dynamics of prices from above and from below, respectively. These are original lines of support and resistance, which most of the time are at levels remote from the price.