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    Forex Trading Guide 2021: System “Inside bar and Bollinger bands”

    The “Inside Bar and Bollinger Bands” trading system is a counter-trend strategy.

    The principle of strategy

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    When the price reaches the support or resistance level, there is a possibility of a reversal in the opposite direction. To determine the levels, we use Bollinger bands, and look for reversal confirmation by the “inside bar” pattern.

    Position opening

    Set the standard Bollinger on the chart with the default settings (20.2). The lower limit is the support level. When the lower border is reached, we are looking for an “inside bar” pattern (this is a bar or candlestick, the max and min of which are inside the previous candlestick). We place a buy stop order at a distance of 1-2 points above the max of the inside bar.

    For sale, reverse conditions. First, the price chart reaches the upper Bollinger band, then, after finding the pattern we need, set the sell stop one or two points below the min of the inside bar.

    Holding an open position

    After the pending order is triggered and a position is opened, set a stop loss. On a long position below the low of an intraday bar, and on a short position above the high.

    After placing StopLoss, set take profit either on the middle line of the indicator for conservative trading or at the opposite border for aggressive trading.

    Since the levels of the Bollinger Bands change with the price change, together with them we adjust the size of the take profit.

     The strategy is suitable for trading on medium and long-term intervals from H1 to W1.

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