326 # 5 min Bollinger Bands Breakout

Bollinger Bands Breakout Trading system

Submit by Wolf 23/02/2013

 

Time Frame 5min

Currency pairs: majors.

 

Setup:

Forex Indicators:

10 EMA, 50 EMA;

Bollinger Bands (20, 2);

Parabolic Sar (default);

MACD Histogram (9,, 12, 26, Close, );

Relative Strength Index (14);

Slow Stochastic (5,3,3, Exponential).

 

trading the breakout is to enter a trade when the price

breaks out’ of a tight range, because often it tends to keep moving in the

same direction. We use our Bollinger Bands on our charts to spot this trading

opportunity.

 

 5 min Bollinger Bands Breakout
5 min Bollinger Bands Breakout
5 min Bollinger Bands Breakout
5 min Bollinger Bands Breakout

In the above example, EUR/USD 5 min chart, notice how the Bollinger Bands

tighten and squeeze together. When this happens you know that there is a

Breakout coming. As soon as the exchange rate line (brown), breaks out of

the outside Bollinger Bands, it signals your entry buy/sell. In this case if you

bought EUR/USD at 1.1815 and Closed your position at 1.1840 , you could

have made a fast 25 pip profit.

 

Notice the confirming indicators: The exchange rate line (brown) is above

the EMA 10 (red), the middle BB line (green) and the EMA 50 blue. The

Parabolic SAR dots are on the bottom.

The MACD Histogram is above 0 signaling upward momentum. The RSI is

above 50 signaling upward momentum, and the Slow Stochastic blue line is

above the red line signaling bullish momentum.

% min Bollinger Bandas breakout
% min Bollinger Bandas breakout

Here is an example of EUR/USD 5 minute breakout SELL. You could have sold

the EUR/USD at 1.1440 and closed your position at 1.1390 for a 50 pip profit.

Notice the confirming indicators: The exchange rate line is below the EMA

10 (red), the middle BB line (green) and the EMA 50 blue. The Parabolic

SAR dots are on the top.

The MACD Histogram is below 0 signaling downward momentum. The RSI

is below 50 signaling downward momentum, and the Slow Stochastic blue

line is below the red line signaling bearish momentum.

 

 

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