c2nw7015 Analysis of Bollinger Middle Band Trend Continuation Signals and Trade Setups March 20th, 2015 by Chis Potton | Category: Trading Systems Bollinger Middle Band is a good tool to follow the strong trends. When a too strong downtrend forms, usually the price moves below Bollinger Middle Band most of the time, and it crosses the middle band when bears get exhausted and the market wants to form a consolidation. In case of the strong uptrends, usually price moves above the middle band and it crosses this moving average (you know that Bollinger Middle Band is a 20 simple moving average) only when it wants to move sideways for a while and form a consolidation. When the trend is still too strong, candlesticks rarely cross the middle band, and continuation trade setups form below the middle band, in case of a downtrend, and above it, in case of an uptrend What you have heard a lot from us is that Bollinger Middle Band is a tricky area and you have to be careful if you want to take the continuation trade setups that form around this moving average. This is really true, and if you check the charts and different time frames of all currency pairs, you will see that markets are used to fool around when they hit the middle band. Usually markets go to an indecision situation when they cross the middle band or form continuation trade setups above/blow So, trading the trade setups that form around the middle band is a little harder. That is why I am trying to write more articles on this topic to shade more light on it. Inti keys, com/analysis- of blinger-midsle-band trend coinuation-signals-and-rade-setips/ [Anatysis of Balinger Middle Bard Trend Continuation Signals ard Trade Setuns Search Articles search here Go GQ) subscribe to our ss Feed Enter your email here to download our e-book for FREE and receive our latest articles in your inbox automatically Co) Send Pages + Home * About + Archive + Contact + Dictionary + Privacy Policy + FxKeys Toolbar + Fxkeys Chat Room + Forex Market Analysis + Disclaimer and Risk Warning Members + User + Login + Logout * Account + Register + Members 16c2nw7015 [Analysis of Bolinger Middle Bard Trend Continuation Signals ard Trade Setuns Although trading the middle band trade setups have a higher risk, following the trends is the best thing traders can do. The question is if we want to avoid the middle band trade setups because of the higher risk they have, is there any other way to trade the continuation trade setups to follow the trends, or we have to forget about following the trends which is the best way to make good profit from markets strong movements? Personally I am used to avoid the middle band trade setups, because I don’t want to take the higher risk they have. However, it doesn’t mean that I don’t trade the trend continuation trade setups, and I don’t follow the trends, Indeed, I take the reversal trade setups with a lot of hesitation and caution, and I love to take the continuation trade setups a lot more than the reversal setups. I take the too strong continuation candlestick signals that form on consolidations, like triangles, that are continuation chart patterns themselves. So far I have shared many of these kinds of trade setups with you on FxKeys. For example, many of the GBP/CAD trade setups that we have followed on FxKeys so far, are among these kinds of continuation trade setups that I am used to follow and take. I will talk more about these non-Bollinger Middle Band continuation trade setups in some other articles, because some of you think that as I don’t recommend you to take the Bollinger Middle Band continuation trade setups, it means I don’t follow the trends and I only take the reversal signals. This is not true. However, in this article, I am going to talk about the Bollinger Middle Band continuation signals more. A couple of days ago, I published another article about Bollinger Middle Band. It was when EUR/CHF formed a strong long trade setup on the daily chart, but I explained why it was not a good setup because it was formed about 50 pips below tpt keys, com/analysis- of blinger-midale-band irend.cosinuaton-signals-arétrade-setup! + Password Reset Recent Posts + How to Measure the Number of Pips of a Price Move on MT4 + How to Distinguish Between Market Maker and True ECNISTP Brokers + How Long Is a Support or Resistance Line Valid’? + Buy Signal Above the Broken Resistance Line on USDICAD Daily Chart + The Difference of Forex Trading and Gambling Categories + Basics (539) + Demo Trading (3) + Candlesticks (32) + Currency Pairs (6) + Forex Brokers (33) + Fundamentals (16) + Australia Cash Rate (1) + Australia Company Operating Profits « + Australia Employment Change (1) + Australia Gross Domestic Product, (1) + Australia Retail Sales (1) 276c2nw7015 [Anatysis of Balinger Middle Bard Trend Continuation Signals ard Trade Setuns the middle band. Now you can refer to EUR/CHF + Australia Trade daily chart and see what happened after that. This Balance (1) + Canada Building is the article: Bollinger Middle Band and Strona Permits (1) ‘Trade Setups + Canada Employment Anyway! Change (1) + Canada Overnight Rate I wanted to talk about the continuation trade setups a that form below or above Bollinger Middle Band on + Canada Trade down and up trends respectively Balance (1) + Canada As you know, there is a too strona downtrend on eremployment ‘ate (1) EUR/USD daily chart since 2014.05.08 that a too «New Zealand strong Bearish Engulfing Pattern with a too strong overseas Trade Bollinger Upper Band breakout formed, EUR/USD Index (1) has been going down very strongly since that time + New Zealand - Trade Balance (1) = + Unemployment Rate (AUD) (1) : + Unemployment Rate (USD) (1) + US Average Hourly Earnings a + US Consumer Price Index (CPI) “a + US Core Consumer Price Index (Core CPI) When the price wants to go down and form a downtrend, it has to break below the middle band “ first. Bollinger Middle Band works as a strong + US Core Retail support when the price wants to go down, and a Sales (1) + US New Home Sales (1) + US Non-Farm strong resistance when the price wants to go up. However, this moving average works as a resistance when the price succeeds to break below it. This is a Employment general rule for any kind of support/resistance line Change (2) or level, be it a trend-line, a level like Fibonacci + US Retail Sales level, or a moving average like Bollinger Middle a Band. When a resistance gets broken, it works as a . see) support, and when a support gets broken, it works - us as a resistance after the breakout. When the price Unemployment hits a broken resistance/support, it is called Claims (1) retesting. Retesting means price goes up to retest a + Indicators (30) + Bollinger Bands ” Intro keys, com/analysis- of bolinger-middle-band trend conuation-signals-and-trade-setups/ 316 broken support that is working as a resistance now,c2nw7015 [Analysis of Bolinger Middle Bard Trend Continuation Signals ard Trade Setuns and goes down to retest a broken resistance that is working as a support now. These are the technical analysis basics. Since EUR/USD recent strong downtrend was started by 2014.05.08 candlestick, it has retested and crossed the middle band so many times. When there is a downtrend and the price goes up to retest the middle band, traders wait for a new sell signal to form below the middle band. However, sometimes the price forms a neat and clean sell signal below the middle band while it has gently touched and retested this moving average. And you go short and make money. But sometimes, the price keeps on retesting, closing above/below the middle band, and moving sideways, even after forming a too strong sell signal below the middle band. That is why I say Bollinger Middle Band is a tricky area Let’s analyze EUR/USD downtrend and see how many times it has formed a neat and strong sell signal below the middle band, and how many times it has crossed the middle band and has played a tricky game around it. After the downward movement was started by 2014.05.08 candlestick, a sell signal formed below the middle band by 2014.06.09 candlestick (#1 on the below chart). However, as 2014.06.05 candlestick has a too strong lower shadow, many traders did not consider the 2014.06.09 candlestick as a sell signal and they thought EUR/USD would go up because of the buy signal that 2014.06.05 candlestick had formed. At that time, nobody knew that we would have such a too strong downtrend, because the down movement was fresh. As you see, EUR/USD went up and crossed the middle band, after the 2014.06.09 candlestick sell signal. That was because bears had not taken the control, completely yet. tpt keys, com/analysis- of blinger-midale-band irend.cosinuaton-signals-arétrade-setup! + MACD (4) + RSI (8) + Stochastic (3) + Investment (56) + Make Money (5) + Market Analysis (142) + MetaTrader (11) + Miscellaneous (8) + Money Management (14) + Success (6) + Technical Analysis (48) + Trading Psychology 67) + Trading Systems (69) + Videos (14) Archives + April 2015 + March 2015 + February 2015 + January 2015 + December 2014 + November 2014 + October 2014 + September 2014 + August 2014 + July 2014 + June 2014 + May 2014 + April 2014 + January 2013 + December 2012 Our Daily Posts Calendar April 2015 anecomuzors ‘Anas f Baling idle Bard Trend Cotnuaton Signals and Trae Sets Several candlesticks after that, the 2014.07.15 1203 4 candlestick (#2) formed a good sell signal below the middle band. That was the time that the downtrend was officially started. After this sell signal, the 2014.08.18 candlestick (#3) formed a neat, 131418 16 «17:18 clean and relatively strong sell signal below the 20 21 22/23 24 25 middle band while the downtrend had become too steep and bears had taken the full control. As you 27 28 «29-30 see, before forming this sell signal below the middle band, EUR/USD just bearly went up and formed a «Mar few weak bullish candlesticks, touched (retested) the middle band gently, and formed a sell signal by 2014.08.18 candlestick below the middle band. This is the sample of a typical continuation signal formed below the middle band on a downtrend. Let’s go ahead and check the rest of the downtrend now. After trade setup #3 formed by 2014.08.18 candlestick, several more trade setups formed below the middle band. As you see, trade setups #4 and #5 looked good, but they would hit the stop loss if we had taken them (because we set the stop loss above the high price of the candlestick that forms the sell signal below the middle band). Trade setup #6 also looked good, but even that one could hit the stop loss, Trade setup #7 looked too strong, but market didn’t go down strongly after this setup was formed and it could even threaten the stop loss and would hit the stop loss if it was set Intro keys, com/analysis- of bolinger-middle-band trend conuation-signals-and-trade-setups/ 516c2nw7015 [Anatysis of Balinger Middle Bard Trend Continuation Signals ard Trade Setuns right above or at the candlestick #7 high price ‘Trade setup #8 is the second continuation short trade setup that the price moved down very strongly after. But as you see, it is not the typical setup because candlestick #8 and also several candlesticks before, had crossed the middle band. Trade setup #9 formed by 2015,02,06 candlestick as another strong, neat and typical trend continuation short trade setup that formed on EUR/USD downtrend. We reported this short trade setup here right when the 2015.02.06 candlestick closed. Please read the report carefully. Although trade setup #9 was a good, typical and strong setup, EUR/USD moved sideways for several candlesticks after, and it even hit the risky stop loss we are used to place at the middle of the candlestick that forms the trade setup. However, EUR/USD collapsed once again, 20 days later, when the 2015.02.26 candlestick broke below the Bollinger Band Squeeze, and touched the Bollinger Lower Band, EUR/USD went down over 730 pips after the 2015.02.26 candlestick closed Intro keys, com/analysis- of bolinger-middle-band trend conuation-signals-and-trade-setups/ arec2nw7015 [Anatysis of Balinger Middle Bard Trend Continuation Signals ard Trade Setuns Yesterday, another downtrend continuation sell signal formed by 2015.03.19 candlestick (#10 on the above chart). This trade setup also looks too strong, neat and typical. It is formed right below 161.80% level which is plotted based on the high and low price of the bullish movement (from 2015.01.26 candlestick’ low price to 2015.02.03 candlestick high price) Whether this short trade setup, which is even stronger than all the previous short setups, can make EUR/USD move even lower or not, is what we have to wait and see. It is possible that EUR/USD moves sideways for several candlesticks to retest the broken 161.80% level and middle band, and then goes down. It is possible that it collapses strongly to test the 261.80% level and even breaks blow it. In this article, I just showed you some examples of a downtrend which is the most famous trend we currently have over the currency market. However, Intro keys, com/analysis- of bolinger-middle-band trend conuation-signals-and-trade-setups/ m6comuzors ‘Anas f Baling Mid Bard Trend Cotnuaton Signals and Trade Setups it is the same with uptrends. I mean there is the same story when you want to take the Bollinger Middle Band trend continuation trade setups on uptrends, Conclusion It seems Bollinger Middle Band is really a tricky area. So, if you want to take the Bollinger Middle Band trend continuation trade setups, you have to be careful to do it only when it is already proven that there is a too strong trend. Also, you'd better to take the typical and strong trade setups, not the weak and questionable ones. The other thing you have to note is that you’d better to take smaller positions when such trade setups form, and have a wide enough stop loss which is several pips above/below the high/low price of the candlestick that forms the setup in case of short/long setups on down/up trends. Good luck @ Download Our E-book For FREE and Don't Miss Our New Articles: Enter your email address here and check your inbox immediately: | Send b> Learn more: + Bollinger Middle Band and Strong Trade Setups + Dally Candlesticks and Bollinger Middle Band + Again Noise Above Bollinger Middle Band + Will GBP/CAD Break Above Bollinger Middle Band? + How to Trade the Continuation Chart Patterns with Candlesticks and Bollinger Bands + CADICHF and the Power of Bollinger Middle Band and Intro keys, com/analysis- of bolinger-middle-band trend conuation-signals-and-trade-setups/ an.