Combining Bollinger Bands with hammer and inverted hammer candlestick patterns creates a powerful trading strategy that blends volatility analysis with price action signals. Bollinger Bands help traders identify periods of high and low volatility by plotting a simple moving average along with upper and lower bands set two standard deviations away.
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When price touches or breaches the lower Bollinger Band, it can signal potential oversold conditions—an ideal setup for spotting bullish hammer candles. A hammer forming at the lower band indicates strong buying pressure and a possible bullish reversal, making it a prime entry signal.
On the other hand, an inverted hammer that appears near the lower Bollinger Band can also suggest a potential trend reversal, but with a slightly different sentiment. While it still indicates buying interest after initial selling pressure, confirmation is crucial—typically in the form of a strong bullish candle that follows. The inverted hammer is especially valuable in a downtrend, where it acts as a warning shot that bears are losing momentum. When paired with a squeeze in Bollinger Bands (indicating low volatility), a breakout following the inverted hammer can result in explosive upward moves.
To strengthen trade setups using these tools, traders often look for confluence zones—areas where the lower Bollinger Band, support levels, and hammer-like candles align. This multi-layered approach reduces false signals and enhances probability. Conversely, if a hammer or inverted hammer forms at the upper Bollinger Band, it may indicate exhaustion in an uptrend and a possible reversal or pullback. By integrating candlestick psychology with volatility dynamics, traders can time entries and exits with greater precision and manage risk more effectively.
Money Management: It is important to follow up with this strict rule of investment: If you have $100 in your account, each open position should be $5 tops If you have $200 in your account, each open position should be $10 tops If you have $500 in your account, each open position should be $25 tops If you have $1,000 in your account, each open position should be $50 tops If you have $2,000 in your account, each open position should be $100 tops If you have $5,000 in your account, each open position should be $250 tops
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 financial instrument. Any trading decisions that you make are solely your responsibility. Past performance is not necessarily indicative of future results.
00:00In today's video, I'm going to show you a very easy pocket option binary strategy using just one indicator, the Bollinger Bands.
00:08We'll keep it super simple, only one indicator, Bollinger Bands.
00:13Setting, Period 12, Deviation 2, Works on 1-Minute Chart, Trade with 1-Minute Expiry.
00:20This strategy is based on price action, and it works great in all types of market conditions, trending or ranging.
00:27But before we begin, if you're new here, don't forget to subscribe and turn on the bell icon so you never miss a new strategy that could boost your win rate.
00:37A quick but important reminder, binary options trading carries significant financial risk, and you could lose money.
00:44This video is for educational purposes only and not financial advice.
00:49Past performance does not guarantee future results.
00:52Always trade responsibly, never risk money you can't afford to lose, and do your own research before making any trading decisions.
01:00Let's understand the strategy.
01:03Step by step, this strategy is based on price action, and will use the Bollinger Band indicator just to help filter better trade signals.
01:11Sell Trade Setup
01:12Look for a situation where the price touches the upper Bollinger Band.
01:17If a candle closes with a strong upper rejection wick, that means the price is being pushed down.
01:23If the candle is also bearish, that's even better.
01:27In this case, you take a sell trade on the very next candle with a 1-minute expiry.
01:32Buy Trade Setup
01:33Now, for buy trades, wait until the price touches the lower Bollinger Band.
01:38Look for a candle that closes with a strong lower rejection wick.
01:42If the candle is bullish, it gives more confidence.
01:45Then take a buy trade on the next candle with a 1-minute expiry.
01:50Keep it fast.
01:51This strategy is very quick, so always stay focused when you're watching the chart.
01:56One moment of distraction, and you could miss a perfect entry.
02:00Risk Management Tips
02:01Never trade with your emotions.
02:03Always use proper money management.
02:06Risk only 1% to 5% of your capital per trade.
02:10Don't ever risk more than 10% of your total account.
02:13Practice on a demo account first before you go live.
02:17Backtest this strategy using historical charts to build your confidence and improve your accuracy.
02:22And don't forget, check the video description below for more tips and step-by-step instructions
02:27to help you master this strategy even faster.
02:30Now, let's move on to a live trade example, so you can see exactly how this works in the real market.
02:38Keep watching.
02:39This is where the magic happens.
02:41Alright traders, here's a perfect example of a sell trade using our Bollinger Band strategy.
02:47Look at this chart.
02:48The price has touched the upper Bollinger Band.
02:50Now focus on this candle.
02:52It closed with a strong upper wick, meaning buyers tried to push the price up, but sellers
02:57pushed it back down.
02:58And rejection candle is bearish, which gives us extra confirmation.
03:04Why this trade worked.
03:06The price reached the extreme upper zone of the Bollinger Band.
03:10The rejection wick showed seller pressure.
03:13The market was showing signs of reversal from that level.
03:16We followed proper entry timing, entered immediately after the rejection candle.
03:22Remember, don't rush.
03:24Wait for that perfect rejection wick, and only then take the trade.
03:28Be patient, follow the rules, and stick to your risk management plan.
03:32Let us wait for the result till the trade is over.
03:34Remember, we won this trade.
03:36That's the power of a clean setup, simple rules, and proper timing.
03:41Now let's continue and look at a few more examples so you can really understand how and
03:45when to enter the trade using this strategy.
03:48Here I have taken a sell trade because the price touched the upper Bollinger Band line
03:52and a small bearish candle formed with a long upper rejection wick.
03:57It also looks like an inverted hammer pattern, which often signals a possible reversal.
04:01But wait, let's not get too excited just yet.
04:05If you look at the chart carefully, you'll notice that the market is in an uptrend.
04:10And in such trends, price often pulls back slightly before continuing upward.
04:15In fact, just before this candle, the price had already retraced twice using small doji candles,
04:20and then moved higher again.
04:22This current candle, although bearish, is very small, which shows weak selling pressure.
04:28That's a warning sign.
04:29So here's an important lesson.
04:31Even if the candle pattern matches our setup, always check the overall market structure.
04:36If the trend is too strong and the signal is weak, it's better to avoid the trade or wait for stronger confirmation.
04:43Trading is not just about following rules.
04:46It's about understanding context.
04:48That's how you avoid false signals and protect your account from unnecessary losses.
04:53Now, let's wait and watch what happens with this trade.
04:57We lost this trade, and that's okay.
05:00Not every trade will be a winner, and that's something every smart trader must accept.
05:05Trading is not just about winning.
05:06It's about understanding why a setup works or fails, so you can make better decisions in the future.
05:11Losing trades are part of the game, but when you lose with discipline and learning, you're still moving forward.
05:18Goal is not to win 100% of trades, but to take high probability trades with proper risk management.
05:24According to our strategy, this is a high probability setup.
05:28The price has touched the upper Bollinger Band a small body bearish candle has formed.
05:32It has a strong upper rejection wick, showing clear selling pressure, and the pattern matches one of our favorite reversal signals.
05:40All the conditions are aligned.
05:42This is exactly what we wait for.
05:45Now we just need to be patient and let the trade play out.
05:48While we wait, here are a few tips to make this strategy even more powerful.
05:53A wick alone is not enough.
05:55The body of the candle and the trend direction both matter.
05:58Bollinger Bands help us identify overbought and oversold areas.
06:02Combine them with price action, and you increase your chances of success.
06:07This strategy is designed for one-minute candles with one-minute expiry.
06:11Don't change the settings unless you fully backtest them.
06:15Whether this trade wins or loses, the goal is to analyze and improve.
06:19Winning trades give you confidence, but losing trades give you lessons.
06:23We won this trade.
06:25That's the power of following a simple and tested strategy with discipline and patience.
06:29You saw how we waited for the price to touch the upper Bollinger band, confirmed the strong rejection candle, and entered with perfect timing, and it worked beautifully.
06:40This strategy is simple but effective if you follow the rules.
06:44So make sure you practice on a demo account, study past charts, and gain confidence before going live with real money.
06:50Check the video description for strategy tips and extra guidance to help you master this technique.
06:56If you found value in this video, don't forget to
06:59Like the video, comment your thoughts or questions below, subscribe to the channel and turn on the bell so you never miss a winning strategy again.
07:08This is just the beginning.
07:09Many more strategies, live trades, and tutorials are coming your way.
07:14Thanks for watching, and as always, stay disciplined, trade smart, and I'll see you in the next video.
