PICKING TOPS & BOTTOMS

Were you told not to hunt for top and bottom tags when trading? One great dream of scalpers is to be able to pick the start of a top or bottom of a trend when trading Forex. Follow and aim for short, quick profits in whatever time frame you will end up with while searching in the required parameters.

Trading Rules:

     20 SMA (following the middle band) or 20 EMA

     50 Bollinger Band setting with 2.0 standard deviation

     20 %b (less than, between 0% and 20% from the lower band)

     80 %b (greater than, between 80% and 100% from the upper band)

     14 ADX if trend direction needs to be determined further

I would imagine the usual strategy is to exit at the close of the first long profitable candle when going long in a 1 hour chart. Exit after 2 or possibly 3 consecutive profitable candles when trading in other chart entry moments.

Bollinger band tops or bottoms are open prices and close prices which tag the upper and lower standard deviation bands.

You can enter take profits where prices stay above 80%, known as the %b, near to the Bollinger band top and or where prices stay below 20%, still known as the %b, near to the Bollinger band bottom. At 100% the prices are at the upper band, and at 0% the prices are at the lower band. It generally is not a good idea to open a trade between 21% and 79% of what is known as %b. The percentage that prices are away from either the top band or bottom band cannot fluctuate more than 19% to 20% from the lower standard deviation or higher standard deviation lines.

If at the start of an uptrend, we expect a tag of the bands to touch the 20 SMA from below, headed due north where price positions sit at greater than %b .80; at the start of a downtrend, we can expect a tag of the bands to eventually touch the 20 SMA from above, then headed south where price positions sit at less than %b .20 where you can open a sell position accordingly to walking the bands.

Touching the middle band from below during an uptrend, reversals can take place bouncing off or piercing the center band. Downtrends can also bounce off or pierce the middle band where reversals take place.

You can tell with astonishing precision where the next tag of the upper band or lower band will be after the trend ends. How far prices trend after a tag might be confirmed in advance when the prices are still at the lower or upper band using the %b. Bollinger bands are an accurate trading system that could make your Forex trading entirely about hitting the right bands with a double bottom or double top.