18# Bollinger Bands and RSI Divergence Trading System

Submit by Janus Trader


Time Frame 15 or Higher.

Currency pairs: all.


Bollinger Bands (250; 2); (250;2).

MA 250 Low; MA 250 High

80 Ema

Stochastic (100, 3, 3)

Long Entry:

when price is above 250 sma green line ,80 ema  above 60 line and   stochastic is buy>green line.

Short Entry:

when price is below 250 sma line, 80 ema  below 40 line and stochastic is sell<red line.




Stop loss for buy is 250 EMA Low, Stop Loss for Sell is 250 EMA High.


Take Profit are the bands or ratio 2:1 stop loss.

Rules for Buy Signal:

Price should hit Bollinger band’s oversold level in two places,

one following the other. (Double bottom).

The double bottom should create a convergence in the RSI

indicator. If it didn’t, then it’s not a valid signal. Ignore it.



Rules for Sell Signal:

Price should hit Bollinger Band’s overbought level in two

places, one following the other. (Double top).

The double top should create a divergence in the RSI

indicator. If it didn’t, then it’s not a valid signal. Ignore it.



If the current trend is down, you can re-enter sell at any

overbought level of the Bollinger bands indicator. Your

stoploss should be the last support level. The same for up

trends, but your stoploss in this case should be the last

resistance level.

When you re-enter the market, make sure that the RSI

indicator is on your side. At or above 60 if the trend is up.

and at or below 40 if the trend is down.

Write a comment

Comments: 3
  • #1

    Shane (Thursday, 27 September 2012 22:25)

    this is a great system

  • #2

    Tran Van Tri (Wednesday, 21 October 2015 16:53)

    Tran Van Tri

  • #3

    gf (Saturday, 06 February 2016 16:04)



Share your opinion, can help everyone to understand the forex strategy.

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