Power Bollinger Bands is trading system based on the Bollinger Bands, Stochastic Oscillator and the patterns formation.
Time Frame 4H or daily.
The system works on any pair and Indices.
Setting Chart
Indicators:
Bollinger Bands: period 20, deviations 2;
Stochastic Oscillator (9, 3,3, with levels 80 and 20) that measures overbought and oversold of the price in the market.
Patterns: doji, engulfing pattern, inside candle, pin candle.
Trading Setup
When the Bollinger bands are far enough, wait that the price touches or broken a band, while the stochastic is in a state of overbought (above 80) or oversold (below 20).
Once both of these conditions are met we seek confirmation of entry into the market.
So looking for the following patterns: Engulfing pattern, Pin bar , Inside bar and Doji.
Doji candle:the Doji is a candle indicating a period of indecision of the market the open and close have the same price. The Doji can be interpreted as a reversal signal if it appears with stochastics in overbought or oversold along with the price at the sides with Bollingher bands.
Engulfing pattern: an engulfing candle or also momentum candle, becaouse this pattern is a change of the momentum of the market. the first candle is completly engulfs by the following one.
Inside candle: the inside candle pattern is the complete opposite of the engulfing pattern, the second candle is formed completely inside the body of the previous candle.This pattern may provide a price breakout.
Pin Bar: the pin pattern , it shows huge emotion of the market indicating a potential sign of a reversal of the price.
Example: the buyers pushed the market high but failed to hold it so price returned back to around the open leaving a pin pattern or opposite the sellers pushed the market low but failed to hold it so price returned back to around the open leaving a pin pattern.
Engulfing formation and pin bar pattern are most reliable with a little 'practice you'll soon learn to recognize these patterns and can represent your success.
Trading Rules Power Bollinger Bands
Buy
Bollinger bands are far enough and the price touches or broken lower band,
Stochastic is oversold,
Once both of these conditions are met, we seek confirmation of entry into the market,so looking for the following patterns: Engulfing pattern, Pin bar , Inside bar and Doji.
Sell
Bollinger bands are far enough and the price touches or broken upper band,
Stochastic is overbought,
Once both of these conditions are met, we seek confirmation of entry into the market,so looking for the following patterns: Engulfing pattern, Pin bar , Inside bar and Doji.
Exit position
Initial stop loss on the previous High/Low after move stop loss at the break even
make profit at the middle band or at the opposite band.
EUR/USD 4H chart
1. Sell signal with a pin bar confirmation and stochastic in overbought
2. Buy with pin bar pattern confirmation and stochastic in oversold.
3. Buy signal with inside bar pattern and stochastic in oversold.
4. Sell signal with inside bar pattern and stochastic in overbought.
5. Buy signal with inside bar pattern for confirmation and stochastic in oversold.
6. Sell signal with an engulfing bar pattern and stochastic in overbougth for confirmation.
7. Buy signal with a inside bar pattern and stochastic in oversold for confirmation.
USD/CAD daily chart
1. Buy with pin bar pattern confirmation and stochastic in oversold.
2. Sell signal with a pin bar confirmation and stochastic in overbought
3. Buy with pin bar pattern confirmation and stochastic in oversold.
Power Bollinger Bands
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Oleh
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