Bollinger Bands, fractals, RSI (Relative Strength Index), and the Stochastic Oscillator are popular technical analysis tools that traders often combine to create a comprehensive trading strategy.
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Bollinger Bands consist of a moving average and two standard deviation bands above and below it, helping traders identify volatility and potential overbought or oversold conditions. When price touches the upper band, it may signal overbought conditions, while a touch on the lower band could indicate an oversold market. Incorporating fractals—repeating patterns that signify potential reversal points—can help confirm support and resistance levels within the Bollinger Bands, enhancing entry and exit precision.
The Relative Strength Index (RSI) measures the speed and change of price movements, typically on a scale of 0 to 100. Readings above 70 suggest an overbought market, while readings below 30 suggest oversold conditions. When RSI aligns with Bollinger Band signals—for example, price touching the upper band while RSI is above 70—it strengthens the case for a potential reversal or pullback. Fractals can further validate these signals by marking significant local highs or lows, giving traders visual cues for possible turning points.
The Stochastic Oscillator complements RSI by comparing a particular closing price to a range of its prices over a certain period, offering insights into momentum. It operates similarly to RSI but can be more sensitive to rapid market changes. When the Stochastic shows divergence (e.g., the price makes a new high but the Stochastic does not), especially near Bollinger Band extremes or confirmed fractals, it can suggest weakening momentum and a potential reversal. By integrating these four tools, traders can form a multi-layered approach that filters out false signals and enhances decision-making in both trending and ranging markets.
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Learn how to day trade. This video is dedicated to 'everyday' folks starting out with a smaller account - think $1000 or less. Like starting any career, there is a lot to learn when you're a day trading beginner. Here are some tips to steer you in the right direction as you start your journey. These tips will get you setup with the proper indicators and settings and strategy, help you decide what to trade and when to trade, show you how much capital you need, how to manage risk, and how to practice a day trading.
We're currently in our 13th year helping traders become successful in the live markets so we know a thing or two about leveraging a small account into serious wins.
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Risk Disclaimer: Trading options involves financial risk and may not be appropriate for all investors. The information presented here is for information and educational purposes only and should not be considered an offer or solicitation to buy or sell any instrument.
00:01Today we are going to see the strategy of four indicators whose settings have been added in a very good way, and in this you can get a very good win ratio.
00:15In this, the time frame has been changed many times and we have got a good expiry time. So first of all we add the settings of the strategy and then we will try to earn some profits on it.
00:31So first of all go to the settings of indicators. And add Bollinger Bands. After that add the fractal indicator as well. And along with this we will also need these two indicators, RSI indicator and stochastic oscillator. So it is necessary to add these as well. Now go to the settings of the Bollinger Bands indicator. And set the period to 20.
00:56And set the deviation to 3. And the settings of its colors are the best. Just make it 2px. And save it. After that go to the settings of the fractal indicator, and set the period to 3. And then save it as well.
01:13After this go to the settings of the RSI indicator, and set the period settings to 10. And then save it as well.
01:23Now lastly go to the settings of the stochastic oscillator indicators. And set 12 in the K period. Then set 2 in the D period. And also set 2 in the smoothing period. And set email here.
01:36There is no need to change its colors. And then save it. And now all the indicators are set here. Now let's add the correct timing for it. So 1 minute candle timing is best.
01:50And expiry time is also good at 1 minute. And today we will set the trade amount to $260.
01:57So here I have got a nice confirmation.
02:06Now here all the indicators had indicated us to place entry in the downward direction. Hence we have placed a double entry here in the downward direction. Like the market should be very close to the upper line of the Bollinger Bands. Like here the market has started going down from the upper line.
02:23And the stochastic was also showing the condition of overbought. And also the RSI line is also very close to this green line. It would have been better if it came on this green line or above it and started going down.
02:37But this is also a good signal. After getting signals from these 3 indicators, you have to wait for the 4th confirmation. And that is the green arrow formed in this fractal indicator. When this green arrow is formed after getting downward signals from 3 indicators, then you can immediately place an entry in the downward direction.
02:57And our entry here is going to win in just a few seconds.
03:02And that's great, our first entry here has won.
03:09So there is a good signal here too, all the 3 confirmations have been completed here. Like the stochastic oscillator is showing overbought condition, and the moving average line of RSI has come very close to this.
03:25green line. And the market has come close to the upper line of Bollinger Bands. But till now the fractal indicator has not given any signal. So we will wait a little.
03:44So here the downward confirmation has been found from the fractal indicator also.
03:51So you must have seen that after all these 3 indicators, Bollinger Bands, RSI indicator and stochastic oscillator provided signals, we waited till we got the confirmations of the fractal indicator, and when it also gave the confirmations, then we placed a double entry in the downward direction.
04:12And that's great. Our second entry here has also won very easily.
04:25So there can be a good confirmation here also.
04:30So here Bollinger Bands, RSI, and stochastic, all these 3 indicators have given an upward signal. As stochastic and RSI indicators are showing oversold conditions. This means that the market has come down a lot. Now the market can rise. And Bollinger is also pointing in the upward direction, but here the fractal indicator has not given any signal yet. So this can be a risky trade.
04:57Because the confirmation of the fractal indicator is also important in this strategy.
05:04So here the entry has lost because the market is very close to the entry point, but now here we have got an upward signal from the fractal indicator as well, that is why we have again placed an entry in the upward direction here. And I think that this time the chances of winning the entry are higher. Because now we have got an upward signal from all the indicators.
05:31And that's great, we have recovered the loss amount and made profits.
05:43So here the stochastic and RSI indicators have shown oversold conditions. And the market was moving upwards by touching the lower line of Bollinger and forming a green candle. So I have placed an entry in the upward direction.
05:59Here also the fractal indicator had not yet given a signal in the upward direction, but I thought this was the right opportunity to place an entry in this chart, because the chart here is a little different. The market is moving sideways.
06:13And maybe now there is a high possibility of a breakdown here. And also here the market had come down very fast, so one or two candles are formed in reverse near the support. Until then our entry can be a winner.
06:31And that's great, our entry easily won here too.
06:40So here also the stochastic and RSI indicators have provided signals in the upward direction. But we will wait till we get a confirmation from the fractal indicator.
06:54So here after getting the signal from the fractal indicator in the upward direction I have placed a triple entry. And I think that this time also the chances of winning entry are high. Because here also all of the indicators have provided us signals.
07:12And that's great, so far we have probably made more than $2,400 in profits. So the win ratio of this strategy is quite good. It just requires practice. Because with practice you will know which market movement is good for this strategy. When would it be right to place an entry? When should an entry be avoided?
07:35And a lot more will be known with practice. So first of all it is important to keep practice in mind.
