Simple Day Trading Strategy Using Bollinger Bands And MACD

This is a simple day trading strategy that combines Bollinger Bands with MACD. MACD alone is not good. It can give false signals. Bollinger Bands alone are also not good. You get false signals. So we combine these 2 indicators in an attempt to find confluence and reduce the false signals and improve our winrate. The rules for this strategy is simple. We place a buy stop order at the upper Bollinger Band when MACD is above zero and signal line is below the MACD histogram and we place a sell stop order at the lower Bollinger Band when MACD is below zero and the signal line is above the MACD histogram. Watch the video below that explains this strategy.

You can also read this article that reviews this day trading strategy in detail. This is what the review says: “Using only two indicators and two simple steps, this is indeed a simple day trading strategy. I have tried it on different time frames and found this day trading strategy to be surprisingly robust, like what Markus Heitkoetter claimed in his article.

By demanding that the MACD rises not only above its signal line, but also its zero line, this day trading strategy is able to locate short-lived intraday trends. This application of MACD is starkly different from Gerald Appel’s original basic MACD trade.

If you want to restrict yourself to only high probability trades, take trades only after MACD first crossed the zero line. This will keep you in fresh trends and not the maturing ones that are more likely to reverse….

This is a good piece of advice. When the trend matures it retraces and then again starts rising or falling again. Many traders enter at the wrong when the trend is ripe for a retracement. So when they enter anticipating a good move in the right direction they get shocked when the price starts retracing in the opposite direction.

You can also watch these 2 videos! The first video explains Bollinger Bands!

This video explains the best indicators for day trading!