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3BB Bollinger Band Trading Strategy

Here is our Bollinger Bands Trading Strategy #2 –

3BB Strategy

Here is another tricky condition to minimize loss (and maximize profit):

  1. After entering the trade in the middle of the 3rd candle formation (as discussed earlier), you should closely monitor the candle’s color.
  2. If the 3rd candle ends as a red candle, indicating a potential reversal or downward movement, take the following action:
  3. Stay in the trade and immediately place two sell orders at the “low” of the last (3rd) candle. This action accomplishes two objectives:

The 3BB strategy carries a high probability of breaking the median Bollinger Band with a 98.5% confidence level.

To enhance the likelihood of a 3BB scenario, look for specific conditions in the 2nd candle:

  • The 2nd candle should close above the upper band of the 2SD (2 Standard Deviations) Bollinger Band, indicating potential upward momentum.
  • To further confirm the 3BB case, prefer the closure of the 2nd candle with the following criteria:
    • The open and close of the green candle should fall within both the 1 SD Bollinger Band and the 2 SD Bollinger Band.

When the second candle concludes its session above the upper band of the 2SD Bollinger, it signals a robust potential for a 3BB scenario. Therefore, my preference is for the second candle to conclude its session within the upper boundaries of both the 1 SD Bollinger and 2 SD Bollinger. 

By ‘closure,’ I mean that both the opening and closing prices of the green candle fall within the range defined by the 1 SD and 2 SD Bollinger bands.

By following this strategy, you aim to minimize losses by responding to potential reversal signals and maximize profits by taking advantage of the 3BB strategy’s high-confidence breakout opportunities.

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