Double Bollinger Band Strategy: A Guide to Forex Trading

Introduction
Traders everywhere are on the lookout for new strategies to give them an edge in the markets. In this article, we will cover the Double Bollinger Band Strategy, which consists of combining two different Bollinger Bands with different settings. We will walk through the setup, the conditions needed to apply it, the advantages and risks associated with the strategy, and examples of it in action.

What is the Double Bollinger Band Strategy?
The Double Bollinger Band Strategy is a trend-counter trend strategy which combines two different Bollinger Bands settings in the same chart. To utilize this strategy, we need the following components: Japanese candlesticks, two different Bollinger Bands settings, RSI, and a creative trader who understands the markets. The strategy requires a trader to identify a predominant trend and then use the two different Bollinger Bands with the RSI to look for a “bounce” in the market during the main direction of the trend.

Advantages
The advantage of this strategy is that it is easy to setup, easy to learn, and can be used in markets that are characterized by strong trends, such as the Forex market. Additionally, the Double Bollinger Band Strategy can help traders to identify potential overbought and oversold situations. This strategy also requires a trader to be patient, as the “bounce” may take some time to materialize.

Risks
The Double Bollinger Band Strategy is not without its risks. The main risk with this strategy is the fact that it is counter-trend, meaning a trade has the potential to move against the trend in a quick manner. This means that it is important for a trader to have a reasonable stop loss in place. Additionally, it is important to set realistic goals when trading with this strategy in order to keep the risk under control.

Usage
The Double Bollinger Band Strategy is best used on liquid markets with strong trends, such as the Forex market. The setup requires two different Bollinger Bands settings, the first one being the more aggressive one, and the second one being the more conservative one. The setup also requires the trader to identify a predominant trend in the market.

Examples of Usage
When the more aggressive Bollinger Band crosses the more conservative one in the same direction of the trend, this generally indicates a purchase signal. When the more aggressive Bollinger Band crosses the more conservative one in the opposite direction of the trend, this indicates a sale signal. In addition, when the RSI begins to rise or fall following the signal, this is generally a confirmation of the signal.

Conclusion
The Double Bollinger Band Strategy can help traders to identify potential overbought and oversold situations in the markets. This strategy is best used on liquid markets with strong trends, such as the Forex market. The setup requires two different Bollinger Bands settings, the first one being the more aggressive one, and the second one being the more conservative one. Additionally, the trader must apply the RSI to the chart in order to confirm the signal. This strategy is not without its risks, as it is counter-trend and thus has the potential to move against the trend in a quick manner. It is important for a trader to have a reasonable stop loss in place when using this strategy.

Introduction to the Double Bollinger Band Strategy

The Double Bollinger Band Strategy is a method for traders to identify potential entry and exit points for a particular asset. The strategy makes use of two Bollinger bands, instead of one. Traders use the upper and lower standard deviation of these bands to identify when to enter and exit positions. As Bollinger bands are designed to capture market volatility, the double bands strategy can offer helpful information about when to enter or exit the market.

How to use the Double Bollinger Band Strategy

The Benefits of the Double Bollinger Band Strategy

The Double Bollinger Band Strategy is a versatile tool that can be applied to any actively traded asset on big liquid markets, such as Forex, stocks and commodities. It’s also helpful to know that the strategy can be applied to any time frame. Therefore, traders can adjust the strategy to fit their trading style and timeframe. Furthermore, the strategy can be used with any trading platform.

The Double Bollinger Band Strategy offers several benefits to traders. By identifying certain price points in which to enter and exit the asset, the strategy reduces traders’ emotional involvement in the trades, allowing them to focus on other areas of their trading. Also, as the bands are formed based on the past and present movements of the asset, they can be easily implemented into a trader’s analysis.

Conclusion

The Double Bollinger Band Strategy is a useful tool for identifying when to enter or exit a trade. It is a straightforward strategy that can be implemented easily and without much emotional involvement. Furthermore, the strategy can be applied to any actively traded asset, thus making it a flexible tool for traders across different markets. As such, the Double Bollinger Band Strategy is an effective tool that traders can use to increase their chances of successful entry and exit points on their trades.