This Forex strategy can be used on ranging market for scalping and intraday purpose. RSI is used in this strategy to find out overbought and oversold area of market price. Bollinger band will give price high and low ranging area. With both indicators, we will get low price to enter buy position and high price to enter sell position. So let's learn about this strategy with chart example.
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1. Bollinger Band Indicator Click here for Bollinger Band setup process
2. RSI Indicator Click here for RSI setup process
Buy Setup Rules
✪ First market price needs to touch lower band of bollinger band.
✪ Then wait for RSI to cross 30 level from lower to upper.
✪ If both conditions fulfills at a time, then open buy position.
✪ If RSI is not near to oversold area, then avoid that.
✪ Set TP 10-40 pips for every buy entry.
✪ Set SL 10-25 pips or set below the recent low candle.
Sell Setup Rules
✪ First market price needs to touch upper band of bollinger band.
✪ Then wait for RSI to cross 70 level from upper to lower
✪ If both conditions fulfills at a time, then open sell position.
✪ If RSI is not near to overbought area, then avoid that.
✪ Set TP 10-40 pips for every sell entry.
✪ Set SL 10-25 pips or set below the recent high candle.
Buy/Sell Setup Examples
In the above AUDUSD M15 chart, price touched upper band of bollinger band and formed bearish candle, then rsi started falling from 70 level. It was perfect sell setup according to this strategy. On the buy setup, we can see price touched bollinger band first, but rsi didn't fulfills the conditions. After 2 candles, rsi confirms buy signal. So for taking entry, we need to wait for both indicators confirmation.
Time Frames: M5, M15, M30.
Currency Pairs: Audusd, Eurusd
Risk Warning: This strategy is suitable for range market situation. In volatile market, you can't get good signals from this strategy. So try to use this strategy on demo and if you satisfied, then you can use this strategy on real account with proper money management.