How to trade with Bollinger Bands
W and M patterns with Bollinger bands
A double top or M pattern is a sell setup. With Bollinger bands it occurs when the following sequence take place:
- price penetrates the lower band,
- pulls back toward the middle line,
- a new subsequent low is formed, and this low is above the lower band and never has touched it.
- a setup is confirmed when price reaches and crosses the middle Bollinger line.
In fact, a very conservative trading approach requires price to cross and close on the other side of Bollinger bands middle line before the trend change is confirmed.
As you have probably noticed, the middle Bollinger bands line is simply a 20 SMA (default) line. This Simple Moving Average (SMA) is by itself a widely used stand alone indicator, which help Forex traders
identify prevailing trends and confirm trading signals.
Copyright © Myfxindicators.blogspot.com
W and M patterns with Bollinger bands
A double top or M pattern is a sell setup. With Bollinger bands it occurs when the following sequence take place:
- price penetrates the lower band,
- pulls back toward the middle line,
- a new subsequent low is formed, and this low is above the lower band and never has touched it.
- a setup is confirmed when price reaches and crosses the middle Bollinger line.
As you have probably noticed, the middle Bollinger bands line is simply a 20 SMA (default) line. This Simple Moving Average (SMA) is by itself a widely used stand alone indicator, which help Forex traders
identify prevailing trends and confirm trading signals.
Copyright © Myfxindicators.blogspot.com
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