Hey!
I really like utilizing Bollinger Bands,
so I maintain considering easy methods to make use of it on a regular basis.
I needed to take a look at negatively correlated pairs and see how they react round prime , mid and backside bb.
Usually if one pair closes above prime BB the opposite one ought to shut at backside bb and vice versa.
For instance should you would take a look at EURUSD VS USDEUR than this could be true each single time, that means that one could be above prime BB and the opposite beneath backside BB each single time.
So this could not assist us merchants in any respect.
Principally I'm on the lookout for divergence within the sense that when one pair is prime BB the opposite one is at prime BB as properly. The nearer they're to one another in value in relation to BB traces the higher.
I needed to make use of 1hr tf in order that I've sufficient indicators and likewise sufficient meat to commerce. I dont need 4 hr or extra due to large SL. However you possibly can strive any tf you want.
The apparent alternative was EURUSD VS USDCHF . yine de, I discovered that there wasnt sufficient pip worth in 1hr. I imply its not unhealthy however I discovered a greater pair.
NZDJPY VS GBPNZD Be happy to seek out different pairs that work nice.
Now for some purpose I picked NZDJPY because the main pair. I dont suppose this issues although, simply go together with the pair that breaks and closes prime or backside BB first.
So I've a chart hooked up with 2 trades on it. Usually its not simple to seek out however they're high quality indicators.
So within the chart you will notice that NZDJPY breaks and closes prime BB whereas GBPNZD remains to be above mid BB (since they're negatively correlated the GBPNZD ought to not less than be near backside BB at this level. However its above mid BB so we benefit from this) So we promote GBPNZD right here hoping that it goes all the way down to backside BB like its suppose to.
Second commerce NZDJPY CLOSES BOTTOM BB whereas GBPNZD remains to be beneath mid bb.
For cease loss within the case of GBPNZD I made a rule to make use of 60 pips as max(you are able to do what u need) Ve 30 pips min. So if the final low/excessive is greater than max or smaller than min we go together with max and min different smart we place sl at prime/backside of final excessive/low.
Take revenue is 1:2 veya 1:1 as much as particular person . I am utilizing 1:2 with breakeven at 1:1 with half taken off.
Different thought about TP is when the main pair (NZDJPY) closes above, beneath or mid BB line we exit.
Let me know what you guys suppose and should you discover any examples with different negatively correlated pairs please put up your charts.
Thanks,
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