Bollinger Squeeze with MACD

The Bollinger Bands Squeeze with MACD Indicator for MT4 is a technical tool that combines some forex indicators for trend momentum insights and market entry ideas. It produces indications which traders may find beneficial for riding trends, thus many traders who use trend-based methods like it.

What is the Bollinger Squeeze with MACD?

Bollinger Squeeze with MACD is a combination of Forex indicators that is used to define the trend and market entrances with a better filter. The Bollinger Squeeze with MACD can be advantageous for regular trend-based trading operations. Bollinger Squeeze with MACD has a nice simple design that allows its readers to simply interpret the signals. It is compatible with any Forex currency pair window and all timeframe charts available on the online Forex trading platform.

Setting up the Bollinger Squeeze with MACD
Setting up the Bollinger Squeeze with MACD

Bollinger Squeeze with MACD Strategy

Bollinger Squeeze with MACD is a basic notion that combines the Bollinger Band Squeeze and MACD for an improvement in trend signaling services. The Bollinger Squeeze shows as a moving average line alongside MACD bars in a separate oscillator window. The Bollinger Squeeze with a positive value and MACD closing above zero and turning green signifies a buy signal as well as a bullish trend. In the opposite scenario, the MACD bars will become red, indicating a negative trend and a sell entry in the market. Blue MACD bars indicate a lack of trend.

Buy Signal

The following could be your checklist for a buy trade:

  • When the Bollinger Squeeze value is positive.
  • When the MACD bars close above the zero-level in green color.

Once these events occur:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the MACD bars close below the zero-level in blue or red color.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Bollinger Squeeze with MACD Buy Setup
Bollinger Squeeze with MACD Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the Bollinger Squeeze value is negative.
  • When the MACD bars close below the zero-level in red color.

Once these events occur:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the MACD bars close above the zero-level in blue or green color.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
Bollinger Squeeze with MACD Sell Setup
Bollinger Squeeze with MACD Sell Setup

Bollinger Squeeze with MACD Pros & Cons

Pros

  • This indicator may inform traders on market’s momentum so they could trade accordingly.
  • For traders who look for divergence in the market, the Bollinger Squeeze with MACD could be a beneficial tool.

Cons

  • The Bollinger Squeeze with MACD may, via its color code, identify a trend correction as a trend reversal sometimes.
  • This indicator may require some additional price action knowledge to utilize optimally.

Conclusion

The Bollinger Bands Squeeze with MACD is a good trading tool that generates signals. It is appropriate for all currency pairs and timeframes. It can be used as an independent technical analysis indicator or as a supplement to any forex strategy. It may be more beneficial during periods of significant market trends. Furthermore, it indicates when the market is neutral, and hence when not to trade. Nevertheless, the traders ought to keep their expectations in check because this indicator is not a holy grail.

Free Forex Robot