Contents:As the current trends of the EUR and the USD are going in the opposite direction, “EBB-1” _ the today star of the binary options strategies will be presented to you as a great tool to take advantage of the present condition. Being covered with subtle and visual indicators as well as simple installation, this strategy will benefit you in the most effective way with precise signs to enter the market. In this article, you will find the guide to apply this strategy on Forex market and earn a substantial fortune.
Overview of Envelopes and Bollinger Bands Strategy
Combination of classic indicators including the Envelopes and Bollinger Bands. It is a good start for newbies and is also worth a try for even the experienced traders. However, it is true that the seem-to-be too simple application of “EBB-1” makes it hard for traders to believe it will bring some good games.
Envelop Indicator Definition
Envelopes are technical indicators that are typically plotted over a price chart with upper and lower bounds. The most common example of an envelope is a moving average envelope, which is created using two moving averages that define upper and lower price range levels.
Controversial discussions took place on many forex forums to reveal a truth that was applied successfully and yielded a considerable profit.
Example, we stated below the results of the applied in practice in a period of more than a year:
- Total profit (in pips) - 2366;
- Total profit (the sum of all wins) - 4472;
- Total loss (the sum of all losses) - 2106;
- Maximum drawdown - 303;
- Profit factor (ratio of profit to losses) - 2.12;
- A reliable profit factor (the ratio of profit to losses, excluding the maximum profitable transaction) - 1,81;
- The minimum depot is 403.
Installing the strategy machine:
- Metatrader 4 is the recommendation of the trading platform with a variety of indicators built inside;
- Envelopes indicator (Period - 288; shift - 1; Exponential; Apply to: Close; Deviation - 0.15);
- Bollinger Bands (Period - 24, Shift - 0, Deviations - 2, Apply to: Close);
- Time interval: H1. This strategy is not suitable for a longer trading time frame.
Conditions for purchases
Bollinger Bands crossed the candle with the blue line of the Envelopes indicator below.
If you like this strategy, you might also be interested in this MACD RSI Alligator strategy
Conditions for sales
Bollinger Bands crossed the candle below the red line of the Envelopes indicator.
Important rules when applying this strategy:
- Traders should open one position at a time only;
- Until the candle of confirmation is fully closed, do not enter the market;
- All signals must be received after one trading day;
- The maximum risk for each transaction shouldn’t be more than 5% of your total balance;
- The order should be set expired in maximum eight hours.
Pros and Cons
- Provides easy-to-spot indicators for intraday traders;
- Easy to install and recognize when the signs show up;
- Provides a detailed guide to make “CALL” or “PUT” orders;
- Requires built-in indicators.
- Requires patience and mentality control;
- Necessitates daily, even hourly market observation;
- Takes time to track potential points for ordering.
Combination off Indicators Envelopes and Bollinger Bands is an effective technical with a considerable return and is covered with the beauty of simplicity. Once again, it is important to note that this strategy is not super profitable, as you can see from the results above. The main advantages are the simplicity and constant. Going along with the H1 time interval, this strategy is incredibly suitable for intraday traders. In addition to a great strategy, to remember exactly the signal movements and adhere strictly to the mentioned rules are compulsory for a success in this market.