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Divergence Momentum with Bollinger Bands

Divergence
trading with Stochastic oscillator and Bollinger Bands.

Divergence
trading for forex and options

Divergence momentum with Bollinger Bands is a strategy
based on divergence using the stochastic indicator of momentum. This trading technique is suitable for both Forex and Options and Binary
Options.

The strategy is simple, the price goes beyond the
Bollinger bands, the price falls within the bands, the stochastic show a divergence – we enter the market.

Time frame 1 min or
higher.

 

Currency pair (major, minor, stock index and
commodity).

Time frame 1 min or
higher.

Currency pair (major, minor, stock index and
commodity).

Binary options time frame 1 and 5 min expiry time 5
candles.

Options Time frame 15 min or higher, expiry time 4-5
candles with strike on key levels of the time frame.

Best Time frame is
daily.

 

Metatrader 4 Indicators

Bollinger Bands (20 period , deviation
2).

Stochastic oscillator divergence
(5,3,3).

 

Trading rules Divergence Momentum with
Bollinger Bands

Buy or Call

The price comes out of the lower band of the bollinger
band then re-enters the band and at the same time the bullish divergence in the stochastic is formed. Open a long position when appears the sell arrow at the the next bar is
opened.

Profit target at he opposite band or ratio stop loss
1:2.

Initial stop loss n..pips (depends by time frame and
pairs) below the previous swing low.

 

Sell or Put

The price comes out of the upper band of the bollinger
band then re-enters the band and at the same time the bearish divergence in the stochastic is formed. Open a short position when appears the sell arrow at the next bar is
opened.

Profit target at he opposite band or ratio stop loss
1:2.

 

Initial stop loss n..pips (depends by time frame and
pairs) below the previous swing high.

In the pictures Divergence Momentum with Bollinger Bands
in action.

Divergence Momentum  with Bollinger Bands
Divergence Momentum with Bollinger Bands

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