Best Bollinger Bands Scalping Strategy

• Scalping is one of the strongest ways to trade forex. It works by entering at strong zones and targeting a small number of profit points, roughly 1 to 10 pips, using a relatively large lot size to make the small move worthwhile.
• Here we look at one strong scalping strategy. First, keep in mind that no strategy is purely profitable, meaning one that produces only winning signals. A working strategy still depends on how you execute it, which is why the same setup makes money for one trader and loses for another. The key is filtering out false signals.
• What filtering means: take buy signals only when the trend is up, and sell signals only when the trend is down. You can do this with an indicator that reads the trend, or with other filters such as trading only at certain times or waiting for confirmation from another indicator.
• You also need a plan for trades that hit the stop. One approach is a reverse entry, opening a trade in the opposite direction with the same or a larger lot, so if a buy is stopped out you enter a sell. Another is a doubling (martingale) approach, entering the next trade or the opposite direction with a doubled lot to try to recover the loss.
• Be careful with the doubling approach. If the strategy produces several losing signals in a row, the doubled positions can grow to a size the account cannot support, which is how martingale blows up an account. This is a high-risk money-management choice, not a guarantee of profit.

Requirements for the scalping strategy

1- Bollinger Bands with its default settings.

2- The Stochastic indicator with its default settings.

3- Apply all of them on the 15-minute time frame.

Buy entry signal

When a 15-minute candle closes below the lower Bollinger band and the gray Stochastic line closes and holds below the 20 level, enter a buy with a stop below the low of the candle that closed, no more than 10 pips away.

Sell entry signal

When a 15-minute candle closes above the upper Bollinger band and the gray Stochastic line closes and holds above the 80 level, enter a sell with a stop above the high of the candle that closed, no more than 10 pips away.

Note: account for any forex news released around the time the signals appear.

Keep in mind that scalping requires a close stop that, at best, does not exceed the size of the target.

In short, the Bollinger Bands scalping strategy above has a few practical points in its favor: it is straightforward to apply, it needs only two indicators, and it lets you trade slow, sideways markets when volatility is low. Scalping stays popular with active traders, but results vary and false signals are part of it.

Read more:

• Elliott Waves for beginners: how to trade with impulsive Elliott waves
• 10 steps to building a successful trading strategy
• The best Heikin Ashi candlestick trading strategy in 5 steps

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