Trading with Bollinger Bands and the 10-period Simple Moving Average (SMA) offers a powerful combination for identifying price volatility and short-term momentum.
Open Account: http://pocketoptioncapital.com
Bollinger Bands consist of a middle band (usually a 20-period SMA) and two outer bands set a standard deviation away from the middle. When used alongside a faster 10 SMA, traders can more precisely time entries and exits during both trending and ranging markets. The 10 SMA helps track short-term trend direction, while the Bollinger Bands frame the broader price action and alert traders to potential breakouts or reversals.
One common strategy is to look for price interactions with the lower or upper Bollinger Band in conjunction with the 10 SMA crossover. For example, if the price touches the lower band and then crosses above the 10 SMA, this can signal a potential bullish reversal. Conversely, if the price hits the upper band and then falls below the 10 SMA, it may indicate the start of a bearish move. These setups are particularly potent when they occur after a period of narrow Bollinger Bands, signaling consolidation and the potential for an explosive breakout.
Traders also use the 10 SMA as a filter for trend direction. When the price remains consistently above the 10 SMA while hugging the upper Bollinger Band, it's a sign of strong bullish momentum. On the flip side, when the price stays below the 10 SMA and presses against the lower band, bearish pressure is likely dominant. This dynamic lets traders ride trends while avoiding false signals, making the Bollinger Bands and 10 SMA combo a versatile tool for scalping, swing trading, or even longer-term strategies.
Open Account: http://pocketoptioncapital.com
Money Management:
It is important to follow up with this strict rule of investment:
If you have $100 in your account, each open position should be $5 tops
If you have $200 in your account, each open position should be $10 tops
If you have $500 in your account, each open position should be $25 tops
If you have $1,000 in your account, each open position should be $50 tops
If you have $2,000 in your account, each open position should be $100 tops
If you have $5,000 in your account, each open position should be $250 tops
We're currently in our 13th year helping traders become successful in the live markets so we know a thing or two about leveraging a small account into serious wins.
Risk Disclaimer:
Trading options involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any financial instrument. Any trading decisions that you make are solely your responsibility. Past performance is not necessarily indicative of future results.
