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Bollinger bands and RSI FOREX strategy

This forex strategy utilizes RSI to determine the trend and to separate trending from ranging market. Once we identify trend, Bollinger bands are used to create tunnel that adapts to market volatility. Strategy has interesting risk reward ratio. With each entry we use tight stop loss and we try to ride the trend for as long as possible.

Bollinger bands and RSI  FOREX strategy

Used forex indicators

Bollinger bands (period 12)

RSI (relative strength index) 65. Remove default 70 and 30 lines. Add 53 and 48 lines.

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Forex strategy rules

RSI range (53 -48) is a no trade range. While indicator remains between those lines, we consider market to be ranging and we do not enter the trade.

SELL:

Bollinger bands and RSI  FOREX strategy

RSI falls below 48 line.

Price touches upper BB line. We enter the trade on first subsequent bearish candle close (it can be the same candle that penetrated BB line).

Stop loss is placed one pip above our signal formation, that penetrated upper BB line.

Take profit: We exit the trade in profit once RSI returns above 48 line.

BUY:

Bollinger bands and RSI  FOREX strategy

RSI rises above 53 line.

Price touches bottom BB line. We enter the trade on first subsequent bullish candle close (it can be the same candle that penetrated BB line).

Stop loss is placed one pip below our signal formation, that penetrated upper BB line.

Take profit: We exit the trade in profit once RSI returns below 53 line.

ABOUT US

THEFOREXKINGS

“Trading FOREX since 2006. Full time trader and web developer since 2013. My two biggest hobbies are trading and web development. In TheForexKings I managed to connect both of them. Even after 12 years of trading I still have the same passion for the market as at the beginning. The aspect I enjoy the most : development and testing of new ideas.” 

 

Only in 2016 - 2017 we have created more than 400 forex strategies. During this period we have also developed and published +200 MT4 Expert advisors based on those strategies. We are dedicated to provide you with viable and complete trading systems that have thrived in extensive historical testing. We want to give you complete and transparent trading solutions, that once mastered ,will set you financially free. We want to give you a fighting and winning chance in the market. ” 

—  Marian, Proprietor of TheForexkings.com

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