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40jap Trade

The document outlines a trading strategy utilizing Bollinger Bands for mean reversion, with specific entry and exit signals based on price interactions with the bands. Long positions are initiated when the price touches the lower band, while short positions are taken at the upper band, with exits typically at the middle band. The strategy emphasizes risk management through predetermined stop loss levels and is more effective in ranging markets rather than trending ones.

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34 views2 pages

40jap Trade

The document outlines a trading strategy utilizing Bollinger Bands for mean reversion, with specific entry and exit signals based on price interactions with the bands. Long positions are initiated when the price touches the lower band, while short positions are taken at the upper band, with exits typically at the middle band. The strategy emphasizes risk management through predetermined stop loss levels and is more effective in ranging markets rather than trending ones.

Uploaded by

emylian123
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as TXT, PDF, TXT or read online on Scribd
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bj4ijypijl https://www.tradingview.

com/script/mWrEBOGb/

Okay, let's break down the trading strategy based on the indicators and signals
shown in the image.

Indicators Used:

Candlestick Chart: Shows price action over the 30-minute timeframe.

Bollinger Bands: The three red lines forming a channel around the price.

Upper Band

Middle Band (Blue Line - likely a Simple Moving Average, SMA)

Lower Band

Custom Entry/Exit Signals: Marked by arrows and Chinese text.

Strategy Type:

This appears to be a Mean Reversion strategy using Bollinger Bands, potentially


combined with elements of trend following or confirmation, indicated by the
specific exit points. The core idea is to bet on the price returning towards the
middle band (mean) after touching the outer bands (extremes).

Trading Rules (Based on the Visual Signals):

Long Entry ("多买入" - Blue Up Arrow):

Condition: Enter a LONG position when the price touches or slightly


penetrates the Lower Bollinger Band.

Short Entry ("空卖入" - Red Down Arrow):

Condition: Enter a SHORT position when the price touches or slightly


penetrates the Upper Bollinger Band.

Long Exit (Take Profit) ("多卖出" - Purple Down Arrow):

Condition: Exit the LONG position (Take Profit) when the price touches or
crosses above the Middle Bollinger Band (the blue SMA). In some cases, the exit
might occur near the upper band if the momentum is strong, but the most consistent
target appears to be the middle band.

Short Exit (Take Profit) ("空卖出" - Purple Up Arrow):

Condition: Exit the SHORT position (Take Profit) when the price touches or
crosses below the Middle Bollinger Band (the blue SMA). Similar to long exits, the
lower band could be a target in strong down-moves, but the middle band is the most
frequent exit signal shown.

Stop Loss ("固定止损" - Fixed Stop Loss signals):

Implied Condition: Although the level isn't shown beforehand, the chart
includes signals marking where a fixed stop loss was triggered (e.g., "空固定止损" means
a short position was stopped out).
Practical Implementation: A stop loss should be placed:

For Longs: Below the entry point, potentially below the low of the
entry candle or a recent swing low outside the lower band.

For Shorts: Above the entry point, potentially above the high of the
entry candle or a recent swing high outside the upper band.

The "fixed" nature suggests it might be a predetermined number of


points/pips or a value based on volatility (like ATR) set at the time of entry.

Summary of the Strategy:

Buy: When price hits the lower Bollinger Band.

Sell (Take Profit from Buy): When price hits the middle Bollinger Band (SMA).

Sell Short: When price hits the upper Bollinger Band.

Cover (Take Profit from Short): When price hits the middle Bollinger Band
(SMA).

Stop Loss: Use a predetermined stop loss level for both long and short
positions to manage risk if the price moves strongly against the trade instead of
reverting to the mean.

Important Considerations:

Market Condition: This strategy generally works better in ranging or


consolidating markets where prices tend to oscillate between the bands. It can
perform poorly during strong, sustained trends where the price "walks the band"
(repeatedly touches the upper or lower band without reverting).

Volatility: Bollinger Bands expand and contract with volatility. Entries might
be more frequent during high volatility, but risks also increase.

Confirmation: The strategy shown doesn't explicitly require confirmation (like


waiting for the candle to close back inside the band), but adding such rules could
potentially filter out some false signals.

Parameters: The effectiveness depends heavily on the Bollinger Band parameters


(period and standard deviation) and the middle band's period. The title mentions
specific parameters (13, 1, 13, 2, 3, 3, 6, 6) which likely define these settings
for this custom indicator, though their exact mapping isn't standard.

Risk Management: Always use appropriate position sizing and adhere strictly to
stop-loss rules.

This interpretation is based solely on the visual cues in the provided image.
Backtesting and further analysis would be required to validate its effectiveness.

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