ADX and Bollinger Bands Indicator
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In this Forex video tutorial, we will combine the ADX and Bollinger Bands Indicator.
To set this strategy up, we first look for the ADX black line to penetrate the 30 level.
Assuming we are looking for a short position…next we look at the price bar… we want to see that the candle is a down bar and of course with a candle down bar it should be red in color.
We want to see that the price also penetrate past the lower Bollinger band to trigger a sell signal.
And as always, we will take a look at the support and resistance level.
As a general rule of thumb, we do not sell at support and we do not buy at resistance.
We can set the T/P Level at the next support level (in the case of a short position).
Similar if the market is trending upwards, then we are on the look out for a buy position.
For us to have any interest at all with a buy position, the ADX black line has to penetrate the 30 level or at least be above it.
The we look for the price candle to be up with a green bar.
We can to see that the price bar penetrating the upper Bollinger band for a buy signal to be triggered.
Next we get confirmation by observing that the Bollinger Band opening up.
Big movements or trend changes when you see the bands opening up.
That’s an indication that some volatility is expected ahead and that’s a good time to be in position.
However, watch the support and resistance level to make sure we do not violate the support/resistance general rule of thumb.
Can’t help but stress over and over again… we do not buy at resistance and we do not sell at support.
With this out of the way, see you on the next video.
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