Simple Bollinger Bands trading strategy

Bollinger Bands is common indicator which is used for different profitable strategy. This Bollinger Bands strategy is very simple. You can use this strategy in ranging market for scalping purpose. From this trading system, you can get reversal signals. Market price usually rejects from the bands of this indicator. So you can get reversal entry easily from this strategy. Risk reward ratio of this strategy is very high. With 25-30 pips risk, you can gain 100-150 pips from this simple strategy.


Required indicator:

Bollinger Bands indicator.


How to get buy signal

Lower bands of this indicators indicates oversold area of the market price. You will get buy signal from this level. If you find any bullish candle on lower bands, then you can take buy entry. If you can get any rejection bullish candle or pin bar on lower bands, then you have to buy to next candle like as below image.


How to get Sell signal

Upper bands are considered as overbought area of the market price. You will get sell signals from upper bands. If you get bearish candle from that upper bands, you can take sell entry. If you get any rejection bearish candle or pin bar on top, then you have to sell to next bearish candle like as below image.





Time frame: H1 time frame is suitable. You can also use on H4, Daily.


Currency pairs: Any pairs.


Take profit and Stop loss: You can set 50-80 pips take profit. You can close half position of your trade when price touch middle band ie 20 Simple moving average. For buy entry, you have to close rest half position when price touch lower bands. For sell entry, you have to close rest half position when price touch upper bands.
You have to set stop loss above swing high for sell entry and below swing low for buy entry.


Risk warning: This strategy is suitable for ranging zone. In volatile market, you can’t use this strategy. When bands are widen, then you should not trade on that moment. As this strategy is made by only indicator, so you have to take entry after candle confirmation. You need to follow money management theory. This is easy strategy but you need to practice this strategy on demo before using on real account.