Simple System

Hello Again,

I would like to share this simple trading system with you.

This system uses a combination of the MACD Histogram, Bollinger Bands and Williams’s %R indicator.

Since there are 2 targets, the profit on this system varies.

Plot Bollinger Bands
Setting:
Default (20, 2)

Plot MACD Histogram
Settings:
Default (9, 12, 26, Close, Exponential)

Plot Williams %R
Settings
Williams %R = 9
Invert Williams %R = ON
I didn’t discuss this indicator earlier but it’s just another indicator, which sits at the bottom of charts. Again, you don’t need to know how it was calculated or what it references; you simply need to take signals from it.


The idea behind this system is to wait until price breaches the outer Bollinger Band.
When it does, you are looking for an opportunity to trade back into the band.
The first target is the middle band and the second target would be the other outer band.
You can trade 2 lots if you wish and exit on of them at the middle band whist letting the other on ride to the second target.

When price breaches the outer band, look for the next MACD Histogram line to go the other way. At the same time, the Williams %R should also be ticking the other way.
Once you have confirmation with these two indicators, you may place a trade headed back into the band.
If the histogram is still going in the same direction as the breakout or the %R indicator is ticking the same way, don’t trade.

Your initial stop loss should be 10 pips above the high (for a short) or below the low (for a long) of the candle that breached the BB provided it was the one, which made the most extreme protrusion from the band.

When you place a trade, make sure that you first target (middle band) is far enough to make a decent profit after covering your spread.

Have a look at the chart for a better understanding.