Forex scalping with bollinger bands
Bollinger Bands can be used in Forex trading and scalping. They work similarly as in other markets like stocks or commodities.
When there are no trend and price moves in a range then we can see that bands are narrow. Price oscillate around the middle of the BB.
When there is a trend, bands get wider. Price stays at one side of Bands and middle average from BB works as a support (or resistance in a downtrend).
So nothing new here. All the good things you now from trading with Bollinger Bands works in Forex too.
Still, you should join them with other tools.
First, I like to join Bands with longer average as a confirmation of trend direction. In my case, it is usually 100 EMA, but you can go with 200 EMA or other. It is simple, when middle average from BB is above my longer average (100) then I can look for long opportunities. If the middle is below 100 average, then I look for short.
Next, there is a MACD to clear false signals. I keep it with longer settings like below (33, 200, 21). I check it to see if MACD is positive or negative (by that I mean if MACD line is above or below the signal line). That is a nice indication of a current trend.
Last, there is a Stochastic. It gives signals to enter or exit a trade.
One more important thing. On the chart above you can see that I wait for confirmation from price and BB (I wait until price closes above middle line of BB, then I know that I can go long).
This is only my approach to trading and scalping with Bollinger Bands. They work well in Forex and you can build many other strategies where you combine Bollinger Bands with other tools.
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