Intraday Trading with Bollinger bands based Strategy-Money Classic Research

Different traders adopt different ways to trade effectively in the Stockmarket. Some traders prefer the intraday trading style and others are interested in short term and long term trading. The intraday trading is accompanied by considerable risks and the trader should have a sound strategy to trade successfully in the intraday trading.

In this article we are going to discuss an intraday strategy with the use of Bollinger bands and candle stick patterns. The Bollinger bands are formed with the moving averages and the Standard deviations across the moving averages. The upper band is formed by the positive standard deviation and the lower one by negative standard deviation.

The Bollinger bands help the traders in several ways by determining the current trend and also the opportunities of trend reversals. An upward sloping Bollinger band indicates an uptrend and the downward facing Bollinger bands indicate a down trend. Also the price movement is seen to be confined in the Bollinger bands. Thus the breakout from the Bollinger bands can be taken as the potential chances of trend reversals. If the breakout from the upper band is observed the trend reversal can occur in the downward side. Similarly if the breakout is observed from the lower band a trend reversal in the upward direction.

The signals from the Bollinger bands can be confirmed by the candle stick patterns. Thus if the reversal is anticipated by the Bollinger bands the reversal candle stick patterns will confirm the trend reversals. Thus if the Bollinger bands indicates reversals and there is doji or engulfing pattern there are high chances of trend reversals.

The advisory firms like Money Classic Research use the strategies like discussed above to generate accurate Stock Market Tips. They provide intraday trading tips and equity tips for the traders with proper Stop Loss.