Saturday, November 15, 2014

Magic Bands Scalp Trading Strategy

This Magic Bands strategy is a trend following tradingstrategy which allows the user to work with fast charts like fiveminute and have reasonable confidence in the system.

The system uses Bollinger Bands andBollinger Bands Stop indicators.

The Bollinger Bands are used to detecttrend, there are two sets of Bollinger Band indicators on the chart.

The Bollinger Bands settings are asfollows:

50, 0.05
15, 0.05

This gives and effect similar to usingtwo moving averages, but a little wider.

The settings for the Bollinger BandsStop indicator are 16,2

The setup for short entry will be whenthe Bbstop is above the price bars, the price is below the 15Bollinger Bands as well as both are below the 50 Bollinger Bands.

The long entry will be available whenprice bars are above the Bbstop as well the 15 Bollinger Bands areabove the 50 Bollinger Bands.

Note: Because this is a trendfollowing system, it is best to ensure that there is a slope to theBollinger 50 before entering. This system will be expensive to tradein a range bound market.

Suitable Markets:

  • Forex
  • Indexes
  • Stocks
  • Futures
  • CFD's

Here are some one minute charts of Google, you can see that there are some nice moves illustrated, Google is quite volatile most days and gives an excellent opportunity for profits

Caution to the trader: The Magic Bands Scalp Strategy is a trend following system, it is most critical that a trend be verified before any entries made.

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