STEP 1
Open up a daily chart
STEP 2
Add the following indicators on the chart.
- Bollinger band (20,2) - Stochastic Oscillator (5,3,3)
STEP 3
Look at price touching upper or lower band for the first time.
If price touches upper band, wait for following candlestick to open. If bearish enter on next candlestick opening making sure stochastic has just started heading down.
If the price touches the lower band, wait for following candlestick to open. If it looks bullish then enter on the next candlestick opening, making sure stochastic has just started its way up.
Note: This strategy works with any timeframe, however I find it much more accurate with the higher timeframes such as 4hr or daily.
Stop loss for this strategy is placed at the nearest swing high/low.
Profit taking depends on the trader. I personally use the Fibonacci expansion as a profit taking. Some of my fellow traders usually take half of their profit as price touches the other end of the band and let the remaining lot run reducing their stop loss to the nearest swing high/low.
Open up a daily chart
STEP 2
Add the following indicators on the chart.
- Bollinger band (20,2) - Stochastic Oscillator (5,3,3)
STEP 3
Look at price touching upper or lower band for the first time.
If price touches upper band, wait for following candlestick to open. If bearish enter on next candlestick opening making sure stochastic has just started heading down.
If the price touches the lower band, wait for following candlestick to open. If it looks bullish then enter on the next candlestick opening, making sure stochastic has just started its way up.
Note: This strategy works with any timeframe, however I find it much more accurate with the higher timeframes such as 4hr or daily.
Stop loss for this strategy is placed at the nearest swing high/low.
Profit taking depends on the trader. I personally use the Fibonacci expansion as a profit taking. Some of my fellow traders usually take half of their profit as price touches the other end of the band and let the remaining lot run reducing their stop loss to the nearest swing high/low.
