MA Bollinger Bands Trading Strategy For MT4

MA Bollinger Bands Trading Strategy For MT4

Please note: This strategy was publicly published in the trading community and is free to use. We do NOT make an attempt to decide if this strategy is profitable or not, because we know that the major factors regarding trading results are the skills/experience of the trader who executes the strategy. Therefore, we are mainly explaining the components and rules of the strategy. If applicable, we are highlighting advantages, disadvantages and possible improvements of the strategy.

 

The MA Bollinger Bands Trading Strategy For MT4 is a unique forex trading system that generates signals for both trend reversals and trend continuations setups. This strategy includes several indicators which act as filters.

You will see that some indicators are used to find the direction of the trend. Other indicators produce arrows on the chart and can be used as entry signals if the required conditions are met.

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Trend based trading doesn’t mean to find a trend and jump on it blindly. You can improve a trend based strategy by measuring the strength of the trend and only jump on strong trends. This filtering can give you an additional edge over the market if you apply it correctly.

This strategy includes a special trend oscillator that gives you the important information about the strength of the trend before you pull the trigger.

According to the inventor, the MA Bollinger Bands Trading Strategy for MT4 can be applied to trade all kinds of forex currency pairs, Indices, and commodities. The inventor of the system says that it can be applied on nearly every time frame. However, we recommend you not to apply it on lower than 15-minute charts for avoiding unnecessary market noise.

Let’s have an overview over all the indicators/tools used in this trading strategy and then we’ll discuss buy and sell setups with chart examples.

 

MA Bollinger Bands Trading Strategy For MT4 Overview


Here is an overview regarding the indicators of the MA Bollinger Bands Trading Strategy for MT4:

 

    • Bollinger Bands: This is a special edition of the Bollinger Bands. This version doesn’t signal the overbought or oversold market like the regular Bollinger Bands. Instead, it creates a trend cloud (similar to the well know Ichimoku indicator) using its bands. The whole cloud works like a moving average.

      When the price enters inside the Bollinger Bands clouds then this means a possible start of a range bound (non trending) market. Until the price moves outside of the cloud again, you can consider the market trend as neutral. 

      The market starts trending again if the price breaks out of the Bollinger Bands cloud.

      For example, we only consider the market is in a bullish trend when the price breaks above the upper line of the Bollinger band. Also, you’ll notice that the price is often using the upper line as a support area.

    • MA BBands: This band represents a composition of a moving average and a Bollinger band. The system mainly uses the middle line of the Bollinger Bands indicator to detect the direction of the trend. If the MA BBands moves above the middle line of the Bollinger band then we define the market in a bullish trend. A bearish trend is signaled, when the MA BBands moves below the mid-Bollinger level.

      We’ve applied MA BBands only to plot the crossover signals with the Bollinger Bands. 

 

For a better visualization, this system includes a BBand Crossover Arrow that points in the direction of the crossover signal at the main chart window.

 

    • Fibonacci Pivots: The indicator Fibonacci pivots plots possible retracement areas on the chart. The horizontal lines plotted by this indicator are working as horizontal support and resistance.

      If you’re looking for a long entry then the price needs to respect the nearest Fibonacci Pivot level as support. For short entry setups, such pivot price levels should act as resistance and reject the price to the downside.

 

    • MA Crossover Candles: It plots a crossover between the 5 and 8 moving averages by changing the color of the price candle.

      A white MA Crossover candle signals for the bullish crossover (MA 5 is above MA 8) and a red bold candle represents the bearish crossover.
       
    • TDI: TDI is a combination of RSI, MAs, and Volatility bands. We’ve applied two TDI levels of 5 and 9 periods for plotting crossover signals as well.

      If the TDI 5 moves higher than TDI 9 level with the indicator value reaches above 50 represents a strong confirmation of a buy signal. Oppositely, TDI 5 moves below the TDI 9 level, and its value drop below the 50 level area signal for the sell confirmation.

 

 

Buy setup using MA Bollinger Bands Trading Strategy For MT4


In this chart example, you’ll notice a white MA crossover candle right below our buy level. The crossover is confirmed by a green upward pointing arrow below the respective candle.

The price manages to close above a Fibonacci Pivot level which can also be seen as a chance for a bullish breakout. In addition, the price candles are closing above the upper line of the Bollinger band (the cloud) treating this level as support. At the same time the MA BBands moves above the Bollinger Band cloud which is also interpreted as an additional confirmation of a valid bullish trend.

Finally, TDI 5 moves above the TDI 9 level and both of them are carrying a 50+ value. According to the inventor of the system, this the necessary confirmation  for a buy entry.

You can set the stop loss order right below the lower line of the Bollinger Band. You can exit a winning position when the MACD crossover candle turns red and TDI value turns negative plotting a bearish crossover at the same time.

 

Buy setup using MA Bollinger Bands Trading Strategy For MT4


For a sell setup you can start by looking for a red MA Crossover candle. You’ll also find a red arrow pointing downwards above of the crossover candle.

In this chart example, you can see that the price moved below of the Bollinger Band cloud and a bearish candle was rejected from the lower line of the Bollinger band cloud. This is a trend continuation signal and we anticipate a further downward move. The MA BBands already moved below of the lower line of the Bollinger band cloud which is also a part of the necessary confirmations for a valid sell setup.

Before you pull the trigger, you need to look at the TDI window. The TDI 5 should move below the TDI 9 level carrying a value that is less than 50. Based on the above confirmation, you may trigger a sell entry with a stop loss order above the upper line of the Bollinger Band cloud.

You can exit a profitable sell position when the TDI value moves above its 50 level and plots a bullish crossover. If the price closes as a bullish MA Crossover Candle then this is an extra confirmation for exit of your sell position.

As always, we recommend that you trade on a demo account first and not start using a new strategy on a real money account. On real money accounts you should have a conservative risk per trade of 0.5% to 2%.

Download the complete system description and the files here:

FREE MA Bollinger Bands Trading Strategy

Download the FREE MA Bollinger Bands Trading Strategy for MT4.

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