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Free Bollinger Bands Trading Strategy (High Risk!)

I’ve got $1,000. I’m going to trade it in a risky way, Using a Bollinger Bands Forex Trading Strategy for the next week and see if I can double it. Let’s go.

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This week I’m trading a Bollinger Band’s Breakout Trading Strategy by Data Trader. The original video has over 400,000 views and the people in the comments seem to think it’s pretty sweet too.

So, I’ll teach you exactly how to use this trading strategy and then I’ll trade it on my live $1,000 trading account to show you the verified results. I might even sprinkle a little high-risk martingale in there, and then we’ll see if I win money or if I lose money.

Bollinger Bands Trading Strategy

Now, I’ve already placed my first trade, so let’s pop up the chart and see how it went. All right, so let’s see this trade play out. You can see the trade was actually awesome. The price was held up by the moving average here pretty well, and then we smashed my take profit at this level rate here for $120 and a 12% win on a trade that had a 2.56 risk reward ratio.

Absolutely fantastic. If this is how the Bollinger Band strategy works the rest of the week, then I might start trading this on my live account all the time.

Let’s pop into my verified, my FX book account Here. You can see I’m up $120 after the first day. If I scroll down, you can see one for one I hit that trade, and this was the trade right here. I hit 40 pips, $120, a three-hour, 58-minute trade, and a 12% gain. Now it’s getting late, so this is probably the only trade I’ll be placing today.

HankoTrade

So next, I’ll show you the Bollinger Bands trading strategy. So, you could try it yourself, but first, if you were looking for a place to trade, check out Hankotrade. You could see this is the broker I’m using in my FXbook. I switched most of my broker accounts to Hanko trade just over a month ago. And ever since I’ve been very happy with the service, very happy with all the withdrawals and very happy with the easy-to-use platform. So, if you are looking for a place to trade, check out Hanko trade. The link is in the description.

See HankoTrade on the Best Forex Brokers page here.

Bollinger Bands Trading Strategy Installation

Now let’s get into the trading strategy and then I’ll continue using the Bollinger Band strategy on my live account after that. All right let’s get started here and install the strategy. The first thing we want to do is check out your timeframe. You could use any timeframe you want. I’m using M5 this week because I want that action. I want those trades to show you. Then just come right over here to indicators and we have three indicators to install. So, let’s install Bollinger bands, so just type Bollinger bands. You’ll find that right there.

Then you’re going to want to install the Bollinger bands width. You’ll find that right there. And then the third one, we want to install the money flow index right there. Perfect. We have all three of those on the chart, and the only thing we’re going to change with the indicators is the money flow index. So just double click on the money flow index right here, come to style and just change the overbought and the oversold to 50 and click okay. So, it looks like this because we’re just using the middle line right here. Now we’ve got all three indicators installed.

Bollinger Bands Trading Strategy Rules

Let’s get right into the strategy. All right, so this is the trade I showed you earlier. You can see we had a really nice breakout and smash to take profit at this level. This all happened because of the Bollinger Bands strategy. We want to see the moving average in a flat range similar to this one right here. And we want to see the Bollinger bands, these right here kind of tight and constraining the price because we’re looking for that big breakout out of this low volatility area.

Then we want to see the bands increasing in width like you’re seeing right here. That’s also what this indicator is doing right here. When this indicator is low, that means the bands like these right here are tight. And when this starts getting higher like this, it means the bands are starting to get wider, which is when we’re starting to look for that breakout move to get a big trade.

The last confirmation is we want to see the price action going in our direction like this, and we want to see that lining up with the money flow index. The third indicator right here coming above the 50 lines, which is this line right here. Once we have all three of those moves being met, we can then place our trade. You can see I set my stop loss below a recent price level right here.

Then for my take profit, I’m actually trailing, so I’m not setting a take profit right here. I’m watching the price come up with the trade. And when the price breaks below the moving average, the orange line right here, that’s when I closed the trade, which I did on my first trade, which got me that 2.56 risk reward ratio. So let me quickly go over it again. You want to see the bands tight like this. You want to see the orange moving average relatively flat like this. Then you want to see the bands expand just like this and the BBW indicator showing the bands increasing as well.

Then you want to see the candles going in the direction you want to trade, and you want to confirm that with the money flow index crossing 50 at that exact same level. Once you get all of those confirmations, you can place the trade. So here is another example. This is a sell trade. Let’s take a look at the recent price action. You can see here we are constrained, right? And we have the flat moving average, and then the price action comes down like this, right? So, we are looking for sell trades in this region. You can see at this level we’re getting an increase in size on the bands. This is shown by the BBW, also increasing starting to go up, and we have the money flow index below 50 at this level. So, this could be a trade entry. So, on this one we would place a short trade at this level right here, we would put our stop loss just above the recent level, which is about five pips. For the take profit, we are just waiting for the price to come back. So, this trade would close out about here.

As soon as the price comes back, as soon as the price comes back above that orange line, this is where we are going to close out the trade rate here. And this is a great trade because this is a 5.35 risk reward ratio. Now if you need any help with this strategy, you can leave a comment asking me below, or you can just rewind the video, watch it all again, and smash that like button while you’re at it so we can get other people to watch this video too.

Live Bollinger Bands Strategy Trading

Now it’s time for me to get back to the charts, start trading this strategy, and then at the end of day two I’ll update you on my trading results. All right let’s go. It’s the end of day two. I’ve had a bunch of trades, let’s get into it. So, my day started today with this Australian dollar, US dollar short trade. You can see here that the Bollinger bands are constrained and then it starts to open up like this. And we also had a relatively flat moving average. So, we’re expecting a breakout out of this position right here. We had the price action going down. We had the BBW indicator here coming up telling us we have the expanding zone, and we have the MFI rate here below 50. So, all our confluences are set. The strategy tells us this should be a sell trade. All right, so let’s watch this trade play out. You could see it went in my direction. At this level, we smashed the trade because the price came above the moving average banking me $110 on this trade. This was a solid trade with a risk reward ratio of about 1.22.

But sadly, after this trade, things took a turn for the worse. All right, so on my next Australian dollar, US dollar trade, you could see here we’ve got the contracting zone. It’s starting to open up. We’ve got price action coming out the top. We’ve got the BBW expanding. We’ve got the MFI above 50. So, we’re really looking for buy trade. This is a prime example of a breakout. What happens? We go in my direction and then it shoots down. I end up losing this trade. I really had all of the confluences set. I followed the strategy to a T, but I did end up losing 90 bucks on this trade. And after day two, it was a little bit disappointing. You can see here I had the nice win, but then I had four losses, all of those losses I followed the strategy to a T, but it just didn’t seem to work out.

And I think that this is a good lesson because it’s important to know that not every strategy is going to work, work every day, not every system, even if followed perfect is going to provide you with winning trades. You can see on some of these trades, I was bumping the lot size up. I was using a little bit of Martin Gale. You could see on this one I bumped the lot size up to 1.8. On this one, I bumped the lot size up to one, which is definitely a risk, and you probably shouldn’t try that at home. So, if we scroll up, you could see after day one I was up 12%.

After day two, I was up just 1.49%, but I’m going to catch some sleep right now, and then I’m going to wake up for day three, trade the entire day, see if I could get this account going in the right direction again. So, let’s get ready for day three. So, on day three, I jacked the lot size up again and I had this US dollar, Canadian dollar trade. You can see here the BBW is widening. You can see I’ve got the Bulger beds opening up. I’ve got a solid, very flat moving average rate here. So, we’re looking for a breakout to the upside, and I’ve got the MFI above 50. I have all my confluences. Let’s go ahead and take a look at this trade. This trade went in my direction. And then because I am trailing the stop, I exit the trade at this level right here. When the price came back across the moving average, this was a solid trade. You could see I had a 3.93 risk reward ratio, and this made me $394. But sadly, just like day two after this one, I slid back into a bit of a losing streak. You can see this was a buy trade rate here. We had the Bulger bands expanding. We had the flat moving average, we had the BBW opening up. We had the MFI above 50. This was a nice-looking trade.

Let me play it out for you. And it really just did not go in my direction at all. I was expecting a breakout to the upside. I followed all of the confluences. I did exactly as I was supposed to do the Bollinger Band strategy. It just didn’t work out. And if we go into the My FX book account, you’ll see it got really ugly. These are all of the trades right here. If we go all the way up to the top, you could see 12% gain, 6% gain. And then day three, I got absolutely hammered. 56% draw down, down 40%, lost $400. And at this point, I ran out of time, so I just wasn’t taking any more trades. Let’s take a look and see the final statistics on this one. We won four out of 16 trades. We lost 12 out of 16 trades. This is not what you want to see from a Bollinger Bands trading strategy. And if I scroll down even further, you can see here these are all of my losses.

It was obviously a really, really tough week, but I don’t want to say, hey, Bollinger Bands is a terrible indicator, or this is a terrible strategy just because of one bad week. I know that there are successful traders that use Bollinger Bands, Bollinger Bands Squeezes, and Bollinger Band breakouts, just like this strategy. So even though this didn’t work out for me, you may want to give it a shot. And if you have any other strategy, you want me to test, if it’s your personal strategy, leave me a comment and I’ll test that strategy next.

As for my VIP group, we did another 11% last month. So now we have six straight winning months in a row in the v I P room. So, I recommend you check that out. Thanks so much for watching this video. I lost $400. I learned a lesson, but I’ll be back with more strategies next week. In the meantime, smash the like button, subscribe to the channel, watch this video. Definitely watch this video. I’m out of here guys. Much love.

About Patrick Ryan

Patrick is a Forex enthusiast, with over 10 years of experience in finance, and market analysis. He's eager to help traders achieve their investment goals, whether they are short or long-term. Patrick's penned thousands of reviews, and is always available to discuss trading with anyone who's interested.

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