Scalping ideas (ADX and Bollinger bands)

Thanks Edward
I am new to forex and still learning on a demo account.Could you suggest any very simple strategy for EUR/US$ which is tried and tested by yourself and I try on my demo account and gain my confidence in my trading
regards
Sadaqat

Hi SADAQAT,

I don't know. I think that's a question to IG Index company.

Regards,
Edward

Could you tell me how to do the two settings of Bollinger Band I.E.
BB(20,1)
BB(20,2)
on the I.G.Index Trading Platform.
Awaiting your reply soon.
Thank you EDWARD
From SADAQAT

I've found that ADX direction is more important than level. Basically a rising ADX indicates increasing trend strength. Some of the best trades are when ADX rises sharply from below 15. If you wait until 20-25, the move will frequently be over by then.
Exception: One very important signal is when the ADX level has risen to a level above the DMI (D+,D- lines). The higher ADX is above both DMI lines, the more likely the trend will end soon. Many times a reversal is coming, but sometimes just consolidation.

Thank you for your patience, didi.
As much as I feel guilty about this delay, I'm overloaded with the work recent days which leaves very little time to do other things.
Anyway, here it goes finally :)

There are two BBands on the chart:
Bbands (Period 20, deviation 1)
Bbands (Period 20, deviation 2)

When price stays inside BB (20, 1), there is no clear trend, taking trades inside dev1 lines is risky.
Once price gets outside dev1 lines (dotted purple lines) - there is an indication of a some trend starting.
While price stays in between dev1 line and dev2 line of Bbands - there is a good trend in place. You can opt to hold onto your trade until it remains inside this trending area.

However, when price hits dev2 line and closes(!) outside it AND the trade has got some positive pips - it is time to either lock the profits, or bring in a trailing stop right behind the most recent candle and chase it with each new candle.

That's the idea, which helps to classify market behavior into phases.

Best regards,
Edward

Hi didi,

I will, I'd get to it on weekend.
Thank you.

Regards,
Edward

Thank you Thomas. Appreciate the Info

The blue is ADX. Green is +DI, red is -DI.
Blue ADX line should be above 20.

Thomas

Andreas. Thank you for your advise. I put ADX 14 in place in the 5 Min chart. I see three lines Blue at the top , green in the middle and red at the bottom, Which line must be above 20 to indicate strength.

I started looking for some good entries to suggest, but then realised, they all can be found in Simple strategies block.
Just compare different entries there, I'm sure, you'll find plenty of good ideas and I'll save some time typing :)

Thomas

Thanks Andreas, for these advice, i am still a baby trader and i do have problems using bollinger bands in the lower time frame to take entries after identifying the trend in the larger time frame.

can you please advice on other INDICATORS and the SETTINGS that can be used effectively for picking entries in the lower time frame after identifying the trend in the larger time frame.

i like using 1hr or 4hr to identify and 15min to take entries.

ADX will mislead you if you try using it for all three time frames.

Instead, apply ADX only for the time frame that is used to identify the main trend. For example, if you use 15 minute charts to identify the main trend, add ADX there to also learn about the strength of the trend. Then move down to lower time frames to identify entries, but already without a help of ADX indicator.

Thomas

ADX indicator readings vary with timeframe, it can be below 5 on a 1 min chart, 20 on a 5 min chart and over 40 on a 15 min chart. I usually use all 3 timeframes to enter traders and adx doesnt seem to fit into place. Any ideas?

Hi Henrique,

That's exactly what you need - Bollinger Band with (20, 2) settings.

Regards,
Edward

Hi Edward


Many thanks for all your strategies. Hopefully sometime I will be able to get some money with Fx.
For now I'm just reading and testing as much as I can, and honestly I'm learning a lot with your help.
I found this Bollinger Bands very helpful, but what the best setting for 5m charts? I'm using 20,2 which is the default in my software.

Cheers from Portugal

Henrique