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.
Used forex indicators
Bollinger bands (period 12)
RSI (relative strength index) 65. Remove default 70 and 30 lines. Add 53 and 48 lines.
For the best results, trade with professional ECN/STP broker with MT4. If you can't trade with profit. Automatically copy the traders that are already profitable.
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:
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:
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.
