375# Rubber Band and Bollinger Bands Trading System

Bands Trading

rubber band and bollinger bands
rubber band and bollinger bands

Submit by JamesUK 29/10/2012


The Rubber band with the Bollinger bands is simple. You want the price to at least

touch the band. I've always used the default settings of two standard

deviations and a moving average length of twenty. You can play around with

that, or not. It's not that big of a deal (which proves that this method is



The above chart is a 4 hour chart of the EUR/USD. With arrows and

numbers, I've highlighted the trades. Let's go over them.

1. This trade would've taken a while but would've been profitable.

2. Stopped out.

3. Great trade.

4. Another great trade.

5. Stopped out.

6. First chance to enter this trade.

7. Second chance to enter this trade. It would've ended at break-even.

8. Nice trade.


9)And the last trade is great.

Two losses, one break-even, and six winners total. Not bad. Now let's look

at some of the trades that weren't taken, and I'll explain why they weren't

valid signals.Yes the green histogram poked out of the black line. However, to make a

valid signal the price would have to touch the upper band or go through it.

Remember, you only have a signal to trade if you get a tag of the upper band

and the green pokes through the black line to the upside, or the price tags the

lower band and the green pokes through the black to the downside.


Here you have a tag of the lower band and the green line has poked out to

the downside lower than the black line. Why is there no trade? Here's the

rule. If the black line is at the zero line (the middle) when the signal occurs,

then the signal is invalid. There is no signal.



Here is another example of the black line being at zero causing the signal to

be invalid.


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

Comments: 1
  • #1

    FXtrader (Monday, 21 July 2014 16:55)


    The RubberBand indicator shown above has only one line (black). However, the indicator version that I have downloaded has two lines (one blue and one pink); is anyone able to please explain what the blue and pink lines represent, and also how they inter-relate to each other and to the histogram?

    Many thanks.

Rubber Band Metatrader 4 indicator
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