The Bollinger band is a very popular indicator widely used by different levels of trader. If you are new to this market, make sure you learn about this indicator as it can help you to improve your trading performance. Most of the time, the traders lose money because they use super complicated indicators. But the elite traders in Singapore always rely on the raw price data. At times they use premium indicators like the Bollinger band tools to execute trades in the market. Though there are many ways to trade the Bollinger band, today we are going to highlight five major steps that can improve your performance.
Trade in the higher time frame
When you use the Bollinger band indicator in the Forex market, make sure you rely on the higher time frame. Using it in the lower time frame increases the risk to a great extent. Some of you might say the Bollinger band tools works like charm in the lower time frame. But that is not always true. Most of the false breakouts occur in the lower time frame and that costs the traders a huge amount of money. Always remember, the selection of the time frame plays an important role when it comes to the trading business.
Trade with the price action signals
You need to trade the Bollinger band with the price action signals. The upper band acts like resistance level and the lower band is the dynamic support level for this pair. If you want to succeed, make sure you look for the bearish price action signals in the upper band. When the price is the lower band, execute the long trade with the bullish price action signals. Based on the direction of the trend, you should try to place your trade. However, if you become good at the price action trading method, you can also trade the major reversal with a high level of accuracy.
Find a great broker
If you start trading with the Bollinger band tool, make sure you find a great broker like the Saxo bank group. Unless you are trading with a premium broker, no matter which trading strategy you use, you are going to lose most of the trades. Though it’s a very complicated process with some minor tweaks in your trading strategy, you can easily manage to find great trades. A good broker will be heavily regulated and it will allow you to execute high-quality trades at any market condition. Think about the professional traders. They never trade with low-end brokers since they know the importance of having access to a professional trading platform.
Trade with proper risk management
If you trade the Bollinger band level, you need to trade the market with proper risk management. Taking too much risk in any trade and trying to earn a huge profit is a very big mistake. Traders are bound to lose trades no matter which trading method they use. So, learn about the risk management policy so that you don’t have to lose a big sum of money by trading the Bollinger band. Even if you lose a few trades in a row, never lose hope, rather consider it as a learning opportunity. Analyze the losing trades in a very effective way so that you can make big profits without losing too much money.
Trade with the trend
When you start trading the Bollinger band, you need to learn the trend trading strategy. Trading with the major trend is one of the most efficient ways to earn money. If you break the rules and trade against the major trend, it won’t take too much time to blow up the trading account. So, focus on a daily or weekly time chart so that you can trade the bands with a high level of accuracy. If you are not sure about the major trend, stay in the sidelines. Never try to trade this market when you are not sure about the direction of the trend.