Developing a System #5 (10-20 pips with BB break)
Submitted by Edward Revy on August 24, 2008 - 16:24.
Submitted by Andy Parker
Hi all. I am new to forex and, like you, are searching for the "holy grail" of trading. I haven't found it yet but I have been looking at trading using bollinger bands and have observed the following: Using any currency pair (or index) using candlesticks and using 1 hour, 4 hour or 1 day timeframes add bollinger bands with settings 20,2.
Now, please forgive me here if I'm repeating what others have already observed but I noticed that if a candle breaks through the upper band it usually goes on to make 10-20 pips long. Likewise if the candle drops through the lower band it usually makes 10-20 pips short.
The interesting thing is that the odds of success seem to be better if the candle STARTS between the bands and then breaks out through either the upper or lower band rather than starting outside of the bands.
As I said I'm no expert and I've never made money consistently at forex but I'm intrigued by my observation and would appreciate your comments or suggestions on how this could be possibly turned into a "proper" reliable strategy.
Likewise, if you feel that following this course is unlikely to bring success for whatever reason please let me know. All comments are valuable.