BEST Bollinger Band Strategy for Daytrading forex ( Bollinger Bands Secret ) ( High Winrate )

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In this video I am going to be showing two ways of using the Bollinger band indicator to generate consistent profits.

But before we start, be sure to subscribe to our channel so that you don’t miss on any of our new videos. With that being said lets get into today's video.

Bollinger bands were developed by a famous technical analyst named John Bollinger. By definition, Bollinger bands is a technical indicator that plots lines that are calculated based on the standard deviation of a simple moving average.

This is how the Bollinger band looks. It consists of three lines. The middle line here is a simple 20 period moving average. The upper line is plotted based on two standard deviations above the 20 period moving average. Similarly, the lower line is calculated based on two standard deviations below the 20 period moving average. These two blue lines can also be called as the upper band and lower band respectively.

The Bollinger bands are very popular among traders because they help in determining whether the price is higher or lower on a relative basis.

Throughout this video, we will use the Bollinger bands on their default settings of a 20 period moving average with a 2 standard deviation.

The distance of the bands is based on standard deviation, and hence, they adjust to the underlying volatility of the asset.

This means that in a side ways market, the bands become tight. And, in trending market conditions the bands become wide.

95 percent of the price action is contained within these bands. Hence, if the price comes near the upper band, we can say that the price is overbought and it may reverse on the down side. Similarly, if the price is near the lower band, we can assume the price to be oversold and an upside move can be expected.

This is not always true. In a strong uptrend, the price can stay around the upper band for several candles. Similarly, in a strong downtrend, the price can stay at the lower band for several candles.

The Bollinger bands can also help in identifying stop loss and profit targets.

For instance, if you place a buy order at the crossover of the middle band, which is the 20 period moving average, the upper band becomes your target. On the other hand, if you place a sell trade at the crossover of the middle band, the lower band becomes your target.

Now that we have understood the basics of the Bollinger bands, its time to come to our first strategy. The name of the first strategy is the squeeze breakout strategy.

This strategy is based on the fact that the market keeps moving from phases of high volatility to phases of low volatility. In other words, the price moves from ranging markets to trending markets.

Hence, if we spot a low volatility market condition, we can expect a big move in any direction.
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