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Band Bounce Forex Trading Strategy

Amandeep Sonewane | Jun. 5, 2019
Band Bounce Forex Trading Strategy

You can now download the Band Bounce Forex Trading Strategy for free on AtoZ Markets indicators gallery.

The concept behind Band Bounce Forex Trading Strategy is to use the EMA band as an indicator to determine trend direction. In this template, we'll be using the various EMAs to make the best trading strategy.

If the 25 EMA is on top and the 100 EMA is at the bottom, then we will be taking buy trades. If the 25 EMA is at the bottom and the 100 EMA at the top, then we will be looking for sell setups. If the EMAs are not stacked, then we will not be taking a trade as the market might still be reversing and has not yet established a trend.

To determine if the market is on an overextended condition we will be using the Robby DSS custom indicator. This is a smooth oscillating indicator which determines turning points by plotting red and blue dots. It also conveniently has an oversold and overbought marker on the 20 and 80 lines. Below the 20 would be considered an oversold market condition. Above the 80 would be an overbought market condition. To determine our entry points, we will be looking for color changes on these areas that agree with the direction of the EMA bands trend bias.

Indicators:

  • 25 EMA: Gold
  • 60 EMA: Green
  • 100 EMA: Brown
  • Robby DSS Forex

Timeframe: 1-hour, 4-hour, and daily charts

Currency Pair: any

Session: any

How to trade with Band Bounce Forex Trading Strategy?

Buy (Long) Trade Setup Rules

Entry:

  • The EMAs should be stacked
    • 25 EMA – top
    • 60 EMA – middle
    • 100 EMA – bottom
  • The Robby DSS should be on an oversold market condition
  • Enter a buy market order on the close of the candle corresponding the color change of the Robby DSS indicator from red to blue

Stop Loss:

  • Set the stop loss at the swing low below the entry candle

Take Profit:

  • Option 1: Set the target take profit at 2x the risk on the stop loss
  • Option 2: Set the target take profit at the high of the prior swing high

Sell (Short) Trade Setup Rules

Entry:

  • The EMAs should be stacked
    • 25 EMA – bottom
    • 60 EMA – middle
    • 100 EMA – top
  • The Robby DSS should be on an overbought market condition
  • Enter a buy market order on the close of the candle corresponding the color change of the Robby DSS indicator from blue to red

Stop Loss:

  • Set the stop loss at the swing high above the entry candle

Take Profit:

  • Option 1: Set the target take profit at 2x the risk on the stop loss
  • Option 2: Set the target take profit at the low of the prior swing low

How to download and install an indicator?

In order to install the indicator on your MT4 platform, you need to follow these steps:

  1. Click on “Download Indicator” button located at the top right corner of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into MT4>Indicator folder of the MetaTrader4 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select “Band Bounce Forex Trading Strategy” template to apply it on the chart.

Note: This indicator was developed by T. Morris. AtoZ Markets does not carry any copyrights over this trading tool.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.