1. Overview
The Double Bollinger Band Strategy utilizes two Bollinger Bands to help traders filter their entries and exits in the forex market. This approach aims to capitalize on price movements by entering Buy trades when the price crosses above the 3σ (3 standard deviations) level and entering Sell trades when it crosses below.
This strategy also leverages the 2σ (2 standard deviations) Bollinger Bands for making informed trading decisions.
Default Parameters:
- 2σ Bollinger Bands (20, 2): This uses a simple moving average of 20 periods and a standard deviation of 2.
- 3σ Bollinger Bands (20, 3): This employs the same moving average of 20 periods but with a standard deviation of 3.
Input Parameters:
Make sure to set these parameters correctly in your trading platform to effectively use this strategy.
2. Long Entry
To open a Buy order, ensure the following two conditions are met:
- Condition 1: The Ask price must cross above the 3σ upper Bollinger Band (BB3UP).
- Condition 2: If Condition 1 is satisfied, check that the current price is within the range of the 2σ upper Bollinger Band (BB2UP) and the 2σ lower Bollinger Band (BB2LO).
3. Sell Entry
To open a Sell order, follow these two conditions:
- Condition 1: The Bid price needs to cross below the 3σ lower Bollinger Band (BB3LO).
- Condition 2: If Condition 1 is met, confirm that the current price is within the range of the 2σ lower Bollinger Band (BB2LO) and the 2σ upper Bollinger Band (BB2UP).
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