Forex Bollinger Bands Trading Strategy

This video demonstrates how to use the Bollinger bands indicator (almost every trading platform features it among its technical indicators). Bollinger bands are useful as they keep the evolution of prices within an envelope, simultaneously providing both support and resistance levels. In the video, the trader looks for a breakout through the bottom of the Bollinger bands and then waits for a backtest of the Bollinger bands where he then sells the currency pair. He says that his exit strategy is to get out of his short position when a significant support level is hit or when the pair closes above the 10-period moving average. He suggests that you avoid shorting the actual downward breakout as the market will normally retrace some of its losses before heading down again. He also provides his customised Bollinger band settings. He sets the Bollinger bands to a length of 14 with a standard deviation of 1. Go here for more info: Bollinger bands.