Simple Moving Average Bollinger Band Strategy

I know that these days trading a system which uses moving averages is rather old fashioned, and it’s all supply and demand these days. But this system works for me, and I wanted to share it.

All trades taken off 15M chart.

Chart Settings:

· 100 EMA, 160 EMA, 200 EMA
· Bollinger Bands, set to 20 period, 2.5 SD
· Daily and Weekly Pivot points.

The moving averages instantly give me a feel for what stage the market is in – chop, range, beginning of a trend, end of a trend etc. The Bollinger Bands give me my entry triggers. I also use Daily and Weekly pivots.

WHAT are we looking for?

The following is WHAT we are looking to see:

· MAs in sequential order, and all BELOW price for a long, ABOVE for a short.
· DP and WP BELOW price for a long, ABOVE for a short.
· The high or low of the candle wick to close outside the upper Bollinger Band (for a short), but the body to close back inside. Vice versa for a long.
· Wait for the hourly close – to close in the right direction of the trade.
· Enter on open of next candle.

WHERE are we looking to take a trade?

This is not a simple ‘set and forget’ system, where you blindly take every trade set-up. You need to be able to identify when the market is ranging or choppy, and stay out. The ideal set-ups occur when price breaks out of a period of consolidation, and retraces.

Additional Trade Filters:

There are additional filters I use to discount potential trade set ups:

· If price has done more than 100% ATR for the week, no trade in same direction.
· If price has done more than 60% ATR (from point of entry), no trade in same direction.
· More than 120% ATR previous day? No trade the next day.
· 3 up or down days in a row, no trade the next day.

Depending on your risk appetite, you can adopt one or more of these additional filters. Similarly, you may not wish to wait for the hourly close if you get a strong signal. It’s up to you. I find that these filters keep me out of a lot of bad trades, although I will ignore them if I see a really good looking set up.

Stops and Targets

These are up to the individual. I usually use a stop of around 30% ATR, and target around 50% ATR, which gives me around 1.6R. These will be adjusted to take into consideration nearby support/resistance etc. I may also get out on a close above/below the swing high/low, or a close above the 100EMA160EMA. Depends on the trade, and PA at the time.

Frequency of Trades

Because we are looking for a very precise set up, under very specific market conditions, these trades will not occur every day on any given currency pair. Maybe you will get one signal a week, maybe 2, maybe none, depending on the ‘cycle’ of the market that the currency pair is in.
For this reason I track 16 pairs: AUDCAD, AUDNZD, AUDUSD, EURAUD, EURCAD, EURGBP, EURJPY, EURNZD, EURUSD, GBPJPY, GBPUSD, NZDCAD, NZDJPY, NZDUSD, USDCAD, USDJPY. It doesn’t take more than 15 minutes or so to check all pairs at the beginning of every day, and to prepare a watchlist of pairs which may potentially set up.

By monitoring multiple pairs, you can afford to be fussy and take only the best set-ups.
As always with these type of strategies, they work best in trending markets. However, trading off a 15 minute chart, and monitoring multiple pairs, it’s not so hard to find a pair which is in a short term trend or breaking out of consolidation.

Attached is the template I use, and the indicators.

Feel free to ask any questions, clarifications etc.

EURUSD trade from yesterday.

NZDJPY from yesterday:





I always take screenshots of the trade as they set-up, so I can learn to recognise successful set-ups in real time.

Here's a chart of EURJPY for last week. Once price had broken out of the previous range, a new trend is established, and the system provides exact entry points. It's a simple case of waiting for the break of high/low outside the Bollinger Band, a clsoe back inside, and price being below the moving averages and pivots.

NZDCAD from today. Am still in this trade.

EURCAD today gave 2 signals. I missed the first as I was sleeping, didn't take the second, as I was already in the NZDCAD trade.

Exited for +23.

Very interesting strategy, thank you for your sharing.

Looks like a great method.
Your charts are too dark to see any detail.

USD/JPY may be working on a Long.

Went long USDJPY. It looks like it met the rules.

Great system Zippy. I trade something similar and it is working well so far.

Thanks

EDIT- Made a profit.

USDCAD could be setting up for a short.

For your ideal setup as you mentioned it, you can use 50 ema to see when price breaks out consolidation and go into consolidation.

This idea is from bbma. When 50 ema goes outside bollinger bands its a sign that it might begin to consolidate.


When 50 ema is below mid bb and price is above mid bb it is an uptrend and vice versa for down trend.

I circled the area when 50 ema goes out of bb. and than it starts to consolidate.

Than you can also trade it as a ranging market. Sell from top bb and tp ad mid bb. buy from bottom bb tp at mid bb.

still a new member to forex kindly someone give me the full names of the abbreviations used above
thank you for your support