Bollinger ATR Bounce Swing Forex Trading Strategy


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

This trading strategy is a mix of toptahlil, Bollinger band and ATR indicator. Bollinger Bands are probably one of the most popular indicators that makes use of channels or bands although there are also other different band-based indicators. They may differ with the way the bands are computed and plotted, but they do work given the right parameters.

How to use Bollinger ATR Bounce Swing Forex Trading Strategy

Many traders are familiar with the Bollinger Bands and how to use it. With this strategy, however, we will be making use of a variation of the Bollinger Band, the toptahlil_bollinger_and_atr_band custom indicator. This indicator has the regular Bollinger Band, but it also has a second set of outer bands, which is based on the Average True Range (ATR). This gives this indicator two outer band sets which we could use as an area of dynamic support or resistance.

We will be trading bounces off this area whenever we spot a decent candlestick with wicks signifying a rejection of these areas. We will only be taking trades with long wicks because these candles signify a quick shift of market sentiment, a shift that takes place in just one period or candle.

However, we will not be taking the trade immediately whenever a pin bar candle appears. We will be waiting for the price to crossover the average price. The toptahlil_bollinger_and_atr_band doesn’t have a midline. For this reason, we will be using a different indicator as a basis for our average price, the TMA custom indicator. This indicator is a type of moving average which could be characterized as a smooth moving indicator.

Although we are taking notice of a possible trade whenever price bounces off the outer bands of the toptahlil_bollinger_and_atr_band, if we take the trade too early, we could still be trading against the trend. Instead of trading right away as soon as price bounces off the outer bands, we will be taking the trade when the change of trend is confirmed by waiting for the price to cross and close beyond the TMA custom indicator.

Indicators:

  • toptahlil_bollinger_and_atr_band: default parameters
  • TMA: default parameters

Timeframe: 1-hour or 4-hour chart

Currency Pair: Any

Buy (Long) Trade Setup Rules

Entry

  • Price should be bouncing off the area of the lower toptahlil_bollinger_and_atr_bands
  • There should be a bullish pin bar candle or a candlestick with long wicks at the bottom, signifying price rejection
  • Wait for price to cross and close above the TMA custom indicator
  • Enter a buy market order at the close of the candle

Stop Loss

  • Set the stop loss below the entry candle

Take Profit

  • Set the take profit target price at 2x the risk on the stop loss

Sell (Short) Trade Setup Rules

Entry

  • Price should be bouncing off the area of the upper toptahlil_bollinger_and_atr_bands
  • There should be a bearish pin bar candle or a candlestick with long wicks at the top, signifying price rejection
  • Wait for price to cross and close below the TMA custom indicator
  • Enter a sell market order at the close of the candle

Stop Loss

  • Set the stop loss above the entry candle

Take Profit

  • Set the take profit target price at 2x the risk on the stop loss

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 the “Download Indicator” button located at the bottom of the screen.
  2. Save the file to your computer.
  3. Extract and move the files into the MT4>Indicator folder of the MetaTrader5 software file directory.
  4. Restart your Metatrader platform.
  5. Navigate to “Indicators.”
  6. And select the “Bollinger ATR Bounce Swing Forex Trading Strategy” template to apply it on the chart.

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

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