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Bollinger Band and Price action Trading strategy

My clients frequently question me-“Hey do you use any indicator”? Most probably my reply will be no-because majority of you guys know, I am a pure Price action trader! But certain time, I feel that there is some credit to the conventional methods and Indicators. I use some with clear statistical evidence. One of them is Bollinger band; hopefully this article will shed some light into a strategy , I use for price action trading Indian markets.

What is this strategy? Is it profitable?

First of all, Indicators based trading is not a holy grail. So I kindly advise using below mentioned strategy at your own application and terms.Most important thing is, I use this strategy only when the market is more random and choppy, these are the times when indicators from momentum, Trend following categories fails brashly.This system is quite easy to follow and initiating trades solely based on this system is not recommended. I add some tit bits of price action along with this system, while using price action trading India markets.(Suggested for Random markets)

System description:

  • Markets: Commodities, Stocks, Futures, currencies NIFTY, BANK NIFTY, MCX Anything!
  • Timeframe: Intraday, Daily and weekly chart timeframes
  • Tools: Bollinger bands and some clear eyes to watch price spikes!!
  • Strategy Name: Bollinger AB- spike

Entry and exit Rules:

  1. Consider the Market Trend and plot the Bollinger band with default setting (20, 2)
  2. Watch for strong spikes either on the top of the band or at the bottom depending on market direction
  3. Enter the trades on the top or bottom of spike after close
  4. Take profit at the counter band depending on the direction

“Beautiful Picture speaks thousand words”

BAB

Plus and Minus!

Advantages:
Easy to follow
Very Powerful random market based system – Applied for Price action trading India markets
Comes along with proper Target levels
Profitable strategy when combined with strict risk mmanagement

Disadvantages:
Very rare setup
Commonly found on Volatile markets and absent in common times

These are the advantages and disadvantages of this system. I am using this since last couple of years well to be honest it has a good success ratio, but you have to wait till the setup becomes visible.

How to know more?

If you have any queries about this strategy please leave a comment below, I will be happy to help.

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About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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