Trend Mirror Bollinger Bands Forex Trading Strategy

The trend mirror Bollinger Bands forex trading strategy is a trading system that pools the reliability of the Bollinger Bands, Trend Signal and the Trend Mirror custom indicator to produce a system that can predict market moves with a high degree of accuracy.

Chart Setup

MetaTrader4 Indicators: Trend_Mirrow.ex4 (default setting), Bollinger Bands (20, 0, 2), Trend_Signal.ex4 (default setting)

Preferred Time Frame(s): 1 Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours

Recommended Trading Sessions: Any

Currency Pairs: any

Download

Download Trend Mirror Bollinger Bands Forex Trading Strategy.

Buy Example (click the image for full size):

trend-mirror-bollinger-bands-forex-strategy

Fig. 1.0

Trading Strategy

Long Entry Rules:

Initiate a “Buy” position when the following rules are on full glare on the activity chart:

  1. Wait for the red Trend Mirror indicator line to cross the blue line upward – this is a bullish signal.
  2. If the green arrow of the Trend Signal indicator points upward, it thus indicates that price is on its way up.
  3. If the Bollinger Bands widens with price breaking out to the upside after some sessions of contraction of its outer bands, a bullish signal is in sight.

Stop Loss for Long Entry: Place stop loss at convenient levels below the outer Bollinger Bands.

Exit Strategy/Take Profit for Long Entry:

The conditions for an exit strategy or take profit is as shown below:

  1. The Trend Mirror indicator lines begin to contract and if by any chance the lines crosses i.e. when the red line crosses the blue line downward, the it is a signal that trend is about to reverse and you should consider your position(s) in the market.
  2. The Trend Signal indicator arrows turns red and is aligned above price bars, an indication that price will reverse.
  3. Any contraction or squeeze in the Bollinger Bands is an indication that momentum is being lost on an existing trend and a possible reversal in trend is underway.

It is important not to wait for all the conditions to show up on your screen, before packing up on your profits.

Sell Entry Rules: Initiating a sell position is the reverse of the rules for a buy entry. Let’s take a look at this works:

  1. Enter a sell position when the red line of the Trend Mirror custom indicator crosses the blue line downward.
  2. The red arrow of the Trend Signal custom indicator is pointing downward and is aligned above the price bars.
  3. The Bollinger Bands expands following a squeeze or contraction, with price breakout in the downward direction.

Stop Loss for Sell Entry: Stop Loss for Sell Entry: Place stop loss at convenient level(s) above the upper Bollinger Bands in line with your personal money management rules.

Exit Strategy/Take Profit for Sell Entry: The following rules should define your exit or take profit strategy:

  1. When the Trend Mirror contracts and the red line crosses the blue line upward, it is an indication that trend is reversing and you should take a leave of your position(s).
  2. The green arrow of the Trend Signal appears below price bars indicating that trend is taking a turn.
  3. The Bollinger Bands contracts, indicating that the trend is losing momentum.

trend-mirror-bollinger-bands-forex-strategy1

Fig. 1.1

Free Download

Download The Trend Mirror Bollinger Bands Forex Trading Strategy.

About The Trading Indicators

The Trend_Signal.ex4 indicator is a trend following indicator that helps find entries and exits. The Trend_Mirror.ex4 on the other hand is an important custom indicator that delivers buy and sell signal when the red line red line crosses the blue line.

The Bollinger Bands is our volatility indicator that consist two outer standard deviations plotted away from the middle simple average line.

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