Forex Strategy With CCI And Bollinger Bands

As the name suggests, this simple forex strategy is composed of the CCI indicator with Bollinger Bands. Use it on the longer time frame’s for more accurate entry signals and better results.

Chart Setup

Indicators: Bollinger Bands (20 period, 2 deviations), Bartimer, Commodity Channel Index (default settings)
Preferred time frame(s): 1 Hour and above
Trading sessions: Any
Preferred Currency pairs: Any

Download

Download the Forex Strategy With CCI And Bollinger Bands for Metatrader 4.

USD/JPY 4 Hour Chart

bollingerbands-cci-forex-strategy

We had 3 buy entry signals on the chart shown above. Bollinger Bands rising + CCI back above -100 from below. Click the chart to enlarge.

Trading Rules

Buy Rules:

  • Bollinger Bands going up (established bullish trend)
  • CCI back above -100 from below (oversold market conditions)

Initiate buy order at the open of the next bar. Place protective stop-loss 5 pips below the previous swing low price or use any other method you prefer.
Suggested targets: (1) Close first half of the long trade at the upper Bollinger Band. (2) Close the remaining half of the position for risk-to-reward 1:2 or better.

Sell Rules:

  • Bollinger Bands falling (established bearish trend)
  • CCI back below +100 from above (overbought market conditions)

Initiate sell order at the open of the next bar. Place protective stop-loss 5 pips above the previous swing high price or use any other method of your preference.
Suggested targets: (1) Close first half of the sell trade at the lower Bollinger Band. (2) Close the remaining half of the position for risk-to-reward 1:2 or better (i.e. risking 35 pips to make 70).

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