48# Double Bollinger Bands Price Action with MACD
Out of bands trading
Reversal Trend Strategy
Submit by Rafay
Double Bollinger Bands Price Action with MACD is an old trick for trading with Bolliger Bands. The principle on which this strategy is based is that when the price goes out for at least two candles outside the band (lower or higher is overbought or oversold and it will probably generate an opposite movement). In composing this trading system I followed this principle but I added another two filters Bollinger Band with a longer period to eliminate further false signals and RSI as an overbought and oversold filter. The entry timing is given by the MACD crossover.
Time Frame 15 min or higher.
Currency pairs: any
Bollinger Bands (20 period, deviation. 2.0).
Bollinger Bands (30 period, deviation. 2.0).
MACD (12, 21,7).
Parabolic Sar (0.02 – 0.2).
RSI period 14, close ( overbought and oversold filter 68-32 levels).
Trading rules Double Bollinger Bands Price Action with MACD
Two candles must close in sequence outside the lower band.
RSI less than or equal to 68.
MACD crosses upward or when Parabolic Sar dot is below the candle.
Two candles must close in sequence outside the upper band.
RSI greater than or equal to 68.
MACD crosses downward or when Parabolic Sar dot is above the candle.
If, after entering, the price goes against us, you can re-enter at the next entry setup until the price touches the opposite band.
Do not enter after the market gaps.
In this strategy it is not profitable to use the double entry because we are against the trend, but to use the stop loss. A stop loss must be associated with each entry. In the images, the stop loss must be associated with the market entries.
Place initial stop loss below/above the previous swing high/low.
Profit target minimum ratio stop loss 1:1 or on the opposite bands.
Note: I have entered the Parabolic Sar but it must be configured in relation to the time frame and currency pair.
Martingale with multiplier 1.5 can be associated with this type of strategy.
Examples of trades
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