Bollinger & MA

The Bollinger & MA trading system. (BMA)

This thread is influenced by the BK8 system. Link. But it is different and also the way I handle the thread is different. The OP BK8 wished that the thread was fully about his system. Many OP's does it that way. I fully respect that, because I have seen so many threads been "hijacked" by people talking totally different systems. But if you request a very strict line, then there are good ideas that are missed. Therefore - in this thread we discus the BMA system which I present below. But it is very welcome to try all timeframes, using it in a different way and bring in confluencing indicators. The purpose is, to make a system giving a nice profit. Just remember what the basis is.

Of cause if anybody tries to Hijack the thread - you are kicked out. Same if people cannot behave. And I mean it and will do.

When the thread was started, we used SMA5. But it gives a lot of signals which are no good. Therefore the strategy now uses only EMA50. The thing about EMA50 is, that it is the trend (other values can be used). So using this strategy you find the BOUNCES from the trend and this is really what matters and what this strategy is about.

In this system there are 3 indicators who are all mandatory.

1. Bollinger.
2. EMA50 - The trendline.
3. Stochastic Variable at 14.3.3.

Timeframe (TF)
I normally use daily. The most stabile. But if someone want to try it on different timeframes - you are very welcome. Let us hear about your results.
But - I have recently started a PROP account and want 1 trade every day. That is not likely at the daily, so I use M30 for that. It is going well.

Instruments
I use the 28 normal FOREX pairs. PLEASE note that this is FOREX Factory and that is what we are trading. You can of cause trade whatever you like, but we only refer to FOREX in this thread.

Strategy - BUY trades. Short trades are opposite.

1. Price reached the low Bollinger border and is now going up.
2. Last bar closed above EMA50. If the the bar is a little short, then wait for then next bar to give confirmation.
3. Stoploss (SL) at the Bollinger band or the last swing low.

When is it not working.

1. EMA50 Must be crossed within 3 - 5 bars after crossing over the Bollinger side band. Otherwise find another trade.
2. In ranging environments (unless you are very experienced). A nice strong trend is necessary.

Exit is not part of this strategy. Let us hear how you does that.

My charts have black background because I am working a lot during night times.

The Robot BolloingerMA_5
Watch post#84 for the latest version. The robot does not trade for you, but it gives you the signals.


OP has reserved the first 9 post's for further explanations and examples.
Update: This was not a good idea. Strategy change of cause as we work with it, that is the point of this thread. But now I am not allowed to edit these post from 2 to 9 - neither am I allowed to deleted any posts.
So please be adviced, that even if I still think that the texts are relevant then some of it is no longer part of this strategy. Sorry for the confusion.

Indicators setup

Robot
The work is ongoing. In a couple of days it is here.

It will not be able to trade for you. It wil give you the signals on a silver plate, but you have to trade manually. But there will be some automated stoploss functionality. More about that later.

The robot will be free. Never for sale. But I will code a stop to ensure that nobody can grab it and sell it. The stop will be prolonged once a year.

Trending trades

How do I see that this chart is trending? There are the difficult answers - and the easy one. EMA50 is going up 35 degree or more.

Yes, it is cherry picked in order to show the system, but hey - this is the kind of picture you want to trade if you are a trend follower.

So there were 5 trades since March. Number #3 was not super perfect, but it had profit.

When the robot comes, it would have generated exactly those 5 signals.

I have only showed the BUY trades. But look at it, there are some very fine SELL trades, even if the trend is upwards. But be sure to have risk management in place and be sure to set SL at break even as soon as possible.

Swing trades

All trends start somewhere. And you don't get the start unless you are ready to trade against the trend. In this example the price is swinging a lot. A trend seems not to be able to continue. So in this case you have to trade against the current trend . or not trade.

Again cherry picked example. But ain't those loads of winning pips wonderfull?

Ranging trades

Most pairs are trending on the daily timeframe, so I had to go down on 1H to find a good ranging example.

As you can see, trades are possible, but they are not as stable as trading the trending pairs. And you must be on your toes the nurse the trades.

Exits
There are no recommended type of exit in the BMA. Let me hear from all of you traders what you are using.

Possibilities:
· Bollinger Exit. If you Buy Long, then exit when the price reach the upper Bollinger band. A quit safe way with lots of positive trades. But also smaller profits than you can get at other methods. At the end of the day this might be one of the best exit methods.
· Parabolic SAR exit. This indicator is NO GOOD at ranging symbols. But in a trend I think it is a nice tool to find the end of the trend.
· Fibonacci - between 50 and 61.8.
· Risk / Reward. Like risk 1 ATR and take profit at 2 ATR.
· Support / Resistance.
· TP at End of Day.
· TP at cross back on SMA5.
and many more.

Many traders like to trade the Entry on a smaller TF, when signal are given at Daily - and then follow the trade at the Daily. That gives a much better Risk/Reward. I never had succes doing that. But I would like to follow any who are using that method.

In smaller timeframes I like to take x% profit according to the account balance at the start of the day. When x% is reached, I close all trades and call it a day.

On this thread I will trade Daily. (Maybe smaller TF during the day to keep me awake ;-). So I take 2 trades at 1% risk each.

1. I use Risk:Reward 1:1 at the first trade.
2. When profit is reached on the first trade, I set BE (Break Even) at #2 and let it run - trailing it with the Parabolic SAR.

But note, that this strategy is often taking the trades faster than the SAR can follow it, and at the beginning of the trade, the SAR might show opposite direction!

Risk Management
It is utmost important that you use Risk Management. Allways risk a small percent of your account.
In this thread I take 2 trades of each signal, risking 1% on each. So how many Lots can I buy then??

Step 1 - find a signal you want to trade.
Step 2 - find the stoploss. It would be either a bollinger band or the last swing high.
Step 3 - Count the pips from the current price to the chosen stoploss.
Step 4 - Go to Position Size Calculator | Myfxbook. Fill in the formula (Easy).

Now you get the trade size in Lots.

Do this every time you trade.

If you then put in the chosen stoploss when you trade, then you will never loose more than the percentage of the account that you choosed.

NOTE! I normally calculate the lot in a spread sheet. So I have not tried this tool myself. Will do in the coming week.

**********************************************************************************************************************************
NEW!!! I found a LOT calculator. It seems to work. Let's check it.
NOTE. When you enter the stoploss, then it is in POINTS. 1 Pip = 10 Points. So if you want a 50 Pips stoploss, you must enter 500!! If you forget it, then you are going to buy 10 times as much as you wanted! Be very carefull.

In the screen STOP is the number of points in the stoploss and RISK is the percentage of the account balance that you wish to risk.

Note that the indicator window of the LOT calculator can be clicked small using the "_".

My trades
I will put 1000$ into an account (real money) and trade the Daily with this system. I will show each and every trade on a spread sheet here. Starting monday 17. October.

There will not be trades every day at the Daily. Therefore I will trade smaller TF for the fun on a Demo account. They will not be counted on the spread sheet, but I will show some selected trades from time to time.

This is the spread sheet I will use. Let me improve it for some days, then I will upload it for others to use it.

Interesting. Waiting for future updates.. God willing going to be profitable for all of us!. God bless.

I've always liked the BK thread, and be giving it a try next week.
I think adding the 50EMA is a great idea.
I'm looking forward of trying this next week, I'll post my trades to.
Cheers !
Have A Great Weekend Traders

Super. We will make this strategy fly together.

Sounds Great, Good Luck!

It's very difficult to see the dark blue and purple MAs on a black background.

You need to click on the picture to enlarge it, then they are visible.

Fine. I will follow your trades with interest!

Great Thread RiskFighter!

Excited to see how your Daily TF trading will go!

Oh - you have an exiting thread as well. I have subscribed :-)

im following! great idea and great man. will see how it goes! Congrats and Goodluck!

Good luck and keep green pips bro.