Bollinger Bands Scalp
Indicators:
Bollinger Bands (50, 0, 2) are yellow
Bollinger Bands (50, 0, 3) are blue
Bollinger Bands (50, 0, 4) are red
RSI (8, close)
Stochastic (14, 3, 3, high/low, 20, 80)
Key conditions:
The timeframe should be at least M30. Enter trades on the next bar. Use a trailing stop of 10-15 points. Signals are considered from the BB centerline only when there is a large bandwidth.
BUY conditions (all conditions must be met):
the price breaks above the lower blue Bollinger Band
RSI and Stochastic indicators turn up from the oversold zone
SELL conditions (all conditions must be met):
the price breaks below the upper blue Bollinger Band
RSI and Stochastic indicators turn down from the overbought zone
Exit criteria: exit the purchase when the first signal occurs from the breakdown of the upper blue Bollinger Band or the breakdown of the upper yellow Bollinger Band, or when the stop loss is hit. Exit the sale when the first signal occurs from the breakdown of the lower blue Bollinger Band or the breakdown of the lower yellow Bollinger Band, or when the stop loss is hit.
Exercise:
Open a chart with a timeframe of at least M30. Apply the Bollinger Bands indicators with settings (50, 0, 2) for yellow, (50, 0, 3) for blue, and (50, 0, 4) for red based on the close price. Add the RSI indicator with a period of 8 and the Stochastic oscillator with settings (14, 3, 3, high/low, 20, 80). Ensure that you are not trading on timeframes lower than M30 and set a trailing stop of 10-15 points.
Look for a BUY signal when the price breaks above the lower blue Bollinger Band and both the RSI and Stochastic indicators turn up from the oversold zone. Enter a long position on the next bar and set a stop loss accordingly. Monitor the trade and exit when a breakdown of the upper blue or upper yellow Bollinger Band occurs, or when the stop loss is hit.
Repeat the process for a SELL signal by identifying when the price breaks below the upper blue Bollinger Band and both the RSI and Stochastic indicators turn down from the overbought zone. Enter a short position on the next bar and set a stop loss accordingly, exiting the trade when a breakdown of the lower blue or lower yellow Bollinger Band occurs or when the stop loss is hit.
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