Today, let’s dive into a trading strategy that revolves around the price breaking out of a higher period Bollinger Band and then making a retracement back into the bands. This method can be quite effective, especially for those of us who are always on the lookout for solid entry points.
Short Trade Setup:
- Wait for the price to close above the upper Bollinger Band.
- Once it closes above, keep an eye out for it to dip back below the upper band.
- At this point, you can enter a short position with a stop loss set at 1 ATR (Average True Range) and a take profit target of 1.5 ATR.
This strategy is versatile and can be applied across various time frames, but I personally recommend using the 15-minute chart. It’s rare to see the daily or 4-hour charts break out of an 800-period Bollinger Band, making shorter time frames a better fit.
To help you out, the Util.mql4 library file is essential for determining lot sizes and ensuring that a new candle has opened before validating your lot size. This will streamline your trading process significantly.
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