Scalping Strategy–FTSE100 5 min Bollinger Bands scalping
Here is a very simple strategy but you do need to familiarize yourself with this strategy before you start using this strategy. It can be effective as it can stop you out quiet frequently. You can trade this on the FTSE100 on a 1min, 5min, 15 min time frame.
Do Not trade this ahead of important data or news. Do Not Trade when there is a lot of strong bad news or good news in the market as the FTSE100 is likely to take a direction. Best to trade it after the FTSE open and before the 13.30 economic data or US open. Unless the economic data that is coming out has no importance.
Settings:
Bollinger Bands 50 period, 2 Standard deviation (magenta)
Bollinger Bands 50 period, 3 Standard deviation (blue)
Bollinger Bands 50 period, 4 Standard deviation (orange)
Spread betting Rules:
Go Long when the price crosses the first Bollinger Band (magenta) to the downside, moving towards the second Bollinger bands (Blue), when it fails to reach the blue band and moves back up, this is when you go long, with your stop loss below the low the candle.
If, instead, the prices cross the blue Bollinger band moving lower towards the orange Bollinger band but fail to break the orange band and moves back up towards the centre of the bands, again this is where you buy and go long with stoploss below the low of the candle. Remember, this time while the prices were moving lower they must not have stalled between the magenta and blue. If you get stopped out, just wait for the next signal.
Go short when the opposite happens.
Scenario A. Prices move higher breaking the magenta bollinger band but failing to reach the blue bollinger band. It moves back towards the centre of the bands, go short with stoploss just above the band.
Scenario B. Prices moves past the magenta and blue bands to then stall between blue and orange. At this point, as prices move back into the bands, tanke a short trade with stio above the spike candle.
In both scenarios, being patient and waiting for the correct setup, is the key to trading.
Ideal scenario: when the markets are trading sideways, or the market is quiet with news to come out in a few days and prices are mainly moving sideways with occasional runs up or down.
What to be careful with this spread betting system is when there is very strong news and the FTSE100 takes a direction. This is a mean reversal strategy, and we don’t want the FTSE100 to move in one direction.
Below is a Spread betting example when the strategy works really well. Prices break the first bollinger band then retraces.
This is a second example of this spread betting scalping system. Here we get stopped out as soon as prices move in a trend. As you can see from the time, it is after 13.30. There was economic data that made the markets take a trend.
Any queries, post a comment and I will be happy to answer
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