Trade Forex Trading

Bollinger Bands for Reversals - Double Tops and Bottoms Trades

Before concluding that a forex reversal is occurring, one should wait for price to change course in the opposite market direction after hitting one of the Bollinger bands.

Even better a fx trader should see the price crossover the moving average.

Double Bottoms Trend Reversals

A double bottom signals a buy. It forms when price drops below the lower Bollinger band, bounces to make the first low, then hits another low above the band.

The second low point recorded in price must not fall below the initial low. Crucially, this second price low must not breach or pierce the lower Bollinger Band. Confirmation for this bullish Forex setup is achieved when the price action subsequently moves and settles above the central band (which represents the simple moving average).

Double Bottom Patterns - Bollinger Reversals with Double Bottoms

Double Bottoms - Utilizing the Double Bottom Setup Pattern within a Bollinger Band Trend Reversal Strategy

Double Top Trend Reversals

The double top pattern is a signal for a potential sell trade. It forms when price activity exceeds the upper Bollinger Band before reversing downward, creating the first high. A second high then emerges below the upper band over time.

The second price high must not be higher than the first one & it important is the second price high does not touch or penetrate the upper Bollinger band. This bearish Forex set-up is confirmed when price action moves & closes below the middle band (simple moving average).

Double Tops with Bollinger Bands - Reversal Trades Using Double Tops

Trend Reversal Indications from Bollinger Bands During Double Top Formations Utilizing Double Top Setups

Get More Topics & Courses:

Forex Broker