Complex trading system #9 (H4 Bollinger Band Breakouts)
Submitted by Edward Revy on February 10, 2008 - 18:14.
H4 Bollinger Band Breakouts
by Rpchost.com
Open the 4 hour chart and choose whatever currency you want.
Insert the Bollinger Band (20) indicator and be sure that its center line is appearing.
Identify 2 valid lower points OR 2 valid higher points in the Bollinger Band and drop a line from the first to the second line; it will be our break line.
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I would guess, if the author offers none, everyone uses their own.
I watched a video about this kind of strategy before but, the author said you should wait for a RSI divergence before the BB trendline break, that will ensure more confidence in the trade
Hi
Which bollinger bands are u using,simple,exponential or what?And what if mine does not have a center line.Please advise
Al
Not sure, why Bollinger Bands should have Simple of Exponential settings.
But just in case, use Simple.
If your Bands don't have the middle line, simply add 20 SMA - it'll become a middle line.
E.g. Bollinger Bands (20, 2) - use 20 SMA
Bolllinger bands (30, 2) - use 30 SMA and so forth.
Thomas
In simple terms - what you are looking at is a moving average and its standard deviations mapped on either side. The candle closing "above" the "breakline" and moving back to the centre line (in the long entry example) is called a mean reversion. That usually happens when an outlier is touched.The "break line" doesnt really bear any relevance other than being a trend line.
Sorry but why don't you just use the candlestick lows for the trend and enter earlier?
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