ADX and Bollinger Band spread betting strategy
Time frame: 5 Min
Indicators used / Settings:
Bollinger Bands (20, 2)
Charts used: FTSE 100
Possible other spread betting charts:GBP
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Entry Rules:
When the ADX is above 25, this indicator tells you that a trend is underway. The whole point of this scalping the FTSE strategy, is to find moments when there is no trend and the FTSE 100 is trading sideways or is consolidating after a move. The whole purpose of this is to be patient. Once the FTSE 100 is consolidating you apply a mean reverting spread betting strategy.
Spread-betting long:
When the ADX is below 25, as the UK100 has stalled after a strong trend, or there is no news and the FTSE is trading sideways. Wait for the prices to drop and touch the lower band. As you see the prices reversing going back up towards the middle 20 moving average line, spread bet long.
You don’t want the price to break the band and close below the band. If the current candle closes below the lower band wait for the first candle to close back above the lower band. Then trade long.
Spread-betting short:
Again the ADX is below 25 and the FTSE is trading sideways. Wait for the prices to move up towards the upper band. As you see the prices reversing going back down towards the middle 20 moving average line, spread bet short.
Ideally you want the prices to touch the bands and move lower / higher. If the prices close above the bands wait for the next bar to close inside the bands.
Strategy does require patience.
Exit Rules:
This is a scalping strategy. Use 5 – 10 point profit and 10 – 15 point stop loss.
stop loss: 15
target: 5-10
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Here is a spread betting example of this ADX and Bollinger Band strategy applied to the FTSE100
In the spread betting example below of the uk100. Prices did bounce off the lower Bollinger band, but failed to move higher. Be careful when prices do not follow through past the middle SMA heading towards the top band. , could indicate a change in trend.
This spread betting strategy can also be applied on :
FTSE, DJI, GBP, Oil
