BSM Forex Trading System
BSM Forex Trading System
In this lesson. We will try to present a technique named BSM Trading System. Which is an extension of Bolinger Stochastics Moving Average Trading System. The model of this trading system is the method using H1 and H4. The first thing to look for is the price through the outer Bollinger Band (set at 3 standard deviations) on the 1H chart.
For this column we are trying to learn Trading System. Which is the column to learn technical analysis by using and dispensing the indicator that is congenital to Meta trader. May be useful.
In this lesson. We will try to present a technique named BSM Trading System. Which is an extension of Bolinger Stochastics Moving Average Trading System.
The method is used on the H1 and H4 charts with the equipment:
Bollinger Bands 2 sets of Bollinger Bands, set at 2 and 3 standard deviations, in s 20 periods. The function of these bands as the backbone of this method / system and the starting point in trade analysis
Stochastics Oscillator, This indicator is often called indi hill and valley, the theory often obtained from this indi, do not do Buy If the price is on the Hill although there is a possibility Rise, And do not do Sell if there is a price in the valley though there is a tendency to be fixed down. The setting we use is 9,3,3.
Moving Avarage, This indicator can give direction and tendency. Is there a strong tendency towards the trend if the trend changes, or vice versa. Similarly, Moving Avarage can signal for support and resistance, and is very useful for setting profit targets and stop loss levels. Used settings are: EMA 8 and 21 EMA to track short-term and 55EMA direction to track medium-term trends. Plus 200 SMA and 800 for long term trends.
Main Indicators: Bollinger Bands (2 standard deviations, 20 periods) – Green Bollinger Bands (3 standard deviations, 20 periods) – Green Stochastics – 9,3,3
Additional Indicators 8 EMA (Red) 21 EMA (Blue) 55EMA (White) 200SMA (Yellow)
How it Works from the System These are:
The model of this trading system is the method using H1 and H4. The first thing to look for is the price through the outer Bollinger Band (set at 3 standard deviations) on the 1H chart. We’ll call it BB3 level. The next thing to look at is that the price has violated the Bollinger Band on H4 (which we’ll call BB2). It tells us that at some point in the near future, we can analyze the pullback or ‘price return The problem is, if the price is in a strong trend (up or down) we can not just take a trade on the basis that the candle is covered outside BB3. we can say that, from a statistical point of view, only 1% of the candle will close the outside BB3, but there is a significant risk if the momentum is strong that the price will continue moving in the same direction. That’s where stochastics comes in. With likelihood is, once we enter the area on BB3 1H, the price possibly will be in Stoch oversold or overbought area (ie less than 20 or greater than 80). However, we need to look before considering the trade is% K across% D from under 20 (for long / long trades) or from above 80 (from short / short trades). H4 can be used as confirmation.
Exit / Take Profit. It’s very difficult sometimes. Because the answer depends on our own. On A Scalper maybe if it seems to have seen profits will close Trade. Take Profit we can set as desired. If Range Is Great This system can be effective. Because it will look overbought or oversold by looking at Stochastic oscillator in Bolinger band. 10 – 30 Pips is enough.