Forex Bollinger Bands Trading System with 4 Time Frame Gann Hilo Indicator

High Accuracy Forex Bollinger Bands Trading System – Bollinger Bands® are volatility bands placed above and below a moving average. Volatility is based on the standard deviation, which changes as volatility increases and decreases.

 
The bands automatically widen when volatility increases and narrow when volatility decreases.
 
This dynamic nature of Bollinger Bands also means they can be used on different securities with the standard settings.
 
For signals, Bollinger Bands can be used to identify M-Tops and W-Bottoms or to determine the strength of the trend. Signals derived from narrowing BandWidth are discussed in the chart school article on BandWidth.

 

How Can We Use Bollinger Bands in Trading and How Its Trade Setups Look Like…?
 
One of the most important features of Bollinger Bands is that when the market is slow and there is no reasonable volatility, the upper and lower bands become close to each other:

 

As you see on the above image, Bollinger upper and lower bands have become so close to each other in the area that I have placed those white arrows.
 
Keep in your mind that when the market becomes slow like that, and it makes a narrow range, a breakout that can be the beginning of a big trend is on the way.
 
You can easily predict the direction of the breakout with the signals that the market already has shown. Just follow the numbers at the above image and you will see what I mean.
 
The candlestick #1 has a long lower shadow. What does that mean…?
 
It means a big Bullish pressure is imposed to the market suddenly. So the price wants to go up. This is the first signal. You could take a long position after this candle, but if you did not, the market would show you some more signals to go long.
 
After candle #1, market becomes slow and Bollinger upper and lower bands become so close to each other.
 
Candle #2 shows a breakout with the Bollinger lower band, but it is closed above it. This candle also has a long lower shadow that reflects the upward pressure.
 
Then the market becomes slow for several candles, BUT candle #3 assures you that the range is broken.
 
So if you didn’t have a long position, you could go long at the close of #3 candle. Then some red candles are appeared, but you should know that after a range breakout, the very first reversal signal is not indeed a reversal signal. It is a continuation signal.
 
The above breakout could be the beginning of a big trend, but it is not. I just brought it here as an example of ranging market and its breakout.
 
If the candlesticks movements make you confused, you can shift to the line chart from time to time and find the real support and resistance of the range.
 
Line chart is plotted based on the close signal. Close signal is the most important thing specially when you want to interpret the signals with Bollinger Bands and predict the market. Let’s shift to line chart and see how it looks like:

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As you see the support and resistance of the range are shown much better in the line chart (blue circles). Numbers 1, 2 and 3 are where the candles #1, #2 and #3 formed on the last image.

In the above line chart the range breakout is confirmed while candle #3 was forming. The price line goes up, touches and rides the Bollinger Upper Band. This means the price has broken above the range, and now we have an uptrend.

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Forex Bollinger Bands Trading Rules

 

Best Time Frame : 15 min or higher.
Currency pair : EUR/USD, GBP/USD, AUD/USD, max spread 0.0022
 
This Trading System is Trend Following and Multitime frame It is based on Gann Indicator and Bollinger bands.
 
Metatrader indicators:

  • Adaptive Gann High-low Activator indicator;
  • 4 time frame Gann Hilo indicator;
  • Bollinger Bands Indicator (10, 2);
  • BUY SELL Signal.

Rules for Forex Bollinger Bands Trading System with 4 Time Frame  Gann Hilo Indicator

 

BUY Rules
  • Adaptive Gann High-low Activator aqua arrow;
  • 4 time frame Gann Hilo indicator 3 or 4 bars;
  • For open a long position to wait that the price bounce into the middle band.

 

SELL Rules
  • Adaptive Gann High-low Activator red arrow;
  • 4 time frame Gann Hilo indicator 3 or 4 bars;
  • For open a Short position to wait that the price bounce into the middle band.

 

EXIT Position options

When Adaptive Gann High-low Activator change color.
Profit Target 8-12 pips depends by currency pair.
Stop loss on the previous swing.



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