Forex Strategies Resources

16# Bollinger Bands with ADX ,RSI and two MA Trading System

Setting Up Your Charts

This system uses 6 time frames, a 4 hour chart, a 1 hour chart, a 30 minute

chart, a 15 minute chart, a 5 minute chart and a 1 minute chart.

Most of your trades will be made on the 1 minute chart but we will still look for

setups on the other time frames as well.

RULES

1. Calculate the daily pivot using the highest, lowest and closing prices of the

previous day's trade and add these to your charts. You can also use the Pivot

Point indicator if your trading platform has this or the Pivot levels you obtain from

your brokerage, if any.

2. Check the 4 Hour chart to determine the overall trend. When the 5 EMA is

above the 10 EMA, the RSI is above 50 and the +DI line is above the -DI line with

the ADX above 25, the trend is UP. When the 5 EMA is below the 10 EMA, the

RSI is below 50 and the +DI line is below the -DI line with the ADX above 25, the

trend is DOWN.

3. After determining the trend on the 4 hour chart, go to the 1 minute chart and

wait for an expansion of the Bollinger Bands and a break out in the direction of

the trend as determined on the 4 hour chart.

 

6. Wait for all EMA's, RSI and ADX to give you a signal before you follow the

Bollinger Band breakout and enter any trades.

7. If you are going long wait for the Bollinger Bands to expand and then look for a

candle to form a high or close above the upper band, then place your entry order

2 pips above the high of this candle once it closes. If you are going short, wait for

the Bollinger Bands to expand and then look for a candle to form a low or close

below the lower band, then place your entry order 2 pips below the low of this

candle once it closes.

8. Place your target limit 20 pips away from your entry level.

9. This system does NOT use a stop loss so you are not required to place a stop

loss.

10. If the 5 minute chart also has a Bollinger Band break out in the same

direction as the trend, you can either modify the order by setting the target profit

to 30 pips or enter a new position using the 5 minute chart. If the 15 minute chart

has a breakout in the same direction as the trend, you can either modify the

order by setting the target profit to 40 pips or enter a new position using the 15

minute chart. If the 30 minute chart has a Bollinger Band breakout in the same

direction as the trend, you can either modify the order by setting the profit target

to 50 pips or enter a new position using the 30 minute chart. If the 1 hour chart

has a Bollinger Band breakout in the same direction as the trend, you can either

modify the order by setting the target profit to the nearest pivot point level or

open a new position using the 1 hour chart.

 

Long Trade Example:

Have a look at the following chart. This is a 4 hour chart of the GBPUSD pair. At

Point A you can see I have added my Pivot levels.

At Point B the 5 EMA has just crossed over the 10 EMA which gives us a signal

to buy.

At Point C the RSI line has moved above the 50 line which is another indication

that we should be looking to buy.

At Point D the +DI line has just moved above the -DI line with the ADX above 25

which tells us that the trend is UP so we will now be switching to our one minute

chart where we will be looking for opportunities to BUY. Have a look at the

following chart:



 

 

 

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