Bollinger Bands is a powerful technical indicator capable of measuring market volatility and is used by many traders. This indicator consists of 3 lines: top line, centerline, and bottom line. Introducing a trading strategy that applies the middle line of the Bollinger Bands indicator. In this strategy, the middle line of the Bollinger Bands indicator is used to provide entry signals when a candle touches it (or touches and closes).

Here's how the Bollinger Bands work:
  • When the Bollinger Band is going up, only look for a chance to enter a buy order;
  • When the Bollinger Band is facing downwards, only look for opportunities to enter a sell order;
  • Rely on the middle Bollinger Band, not the outer 2.
If you use the MetaTrader 4 platform, set up a Bollinger Band indicator when trading with this strategy as follows:


Trading strategy with middle Bollinger Band - Buying condition

Below are the conditions for you to enter a buy order in an uptrend:
  • In the upward trend, the Bollinger Bands will also be directed upwards;
  • You will wait until the price falls and hits the middle Bollinger Band;
  • Place a buy order now or wait until the candle hits the middle Bollinger Band line and then place a buy order.
Trading strategy with middle Bollinger Band - Selling condition

You rely on the following conditions to place a sell order:
  • Bollinger Band must face down;
  • Wait for the price to rebound and touch the middle Bollinger Band;
  • Sell at the touch of the Bollinger Band or sell at the close of the candle.

Trading strategy with middle Bollinger Band - How to place a stop loss

Here's how to place a stop loss when you place a pending order to buy:
  • If you place a pending order to buy when the price hits the middle Bollinger Band, the best stop loss should be at the lower Bollinger Band; and at the close of the candle if the distance is too far move the stop loss at least 5-15 pips below the bottom of the next opening candle;
  • Or if you place a buy order right after the price hits the mid-BB, place a stop loss of at least 5-10 pips below the bottom of the opening candle.
Similarly, how to place a stop loss when placing a pending sell order:
  • Place the stop loss at the same level as the upper BB;
  • Or place a stop loss of 5-15 pips on the top of the opening candle.
Trading strategy with the middle Bollinger Band - How to take profits

Here are a few ways you can take profit when trading with the BB in the middle:
  • If it's a buy trade, take profit as soon as the candle hits the upper BB;
  • If it's a short trade, take profit as soon as the candlestick hits the lower BB;
  • Or you can trail a profitable short by moving the stop loss after the top of each candlestick until the order exits;
  • Similarly, trail stop trade can be bought by moving the stop loss behind the bottom of each candle until the order exits.
Trading strategy with middle Bollinger Band - Summary

This is a very simple strategy that is suitable for new traders entering the market. Summary of some advantages and notes when you trade with Bollinger Band below:
  • If you are a Scalp Trader and prefer to trade on shorter timeframes, you can use this strategy to trade on 1 minute to 5-minute frames;
  • This is also a good Swing trading strategy on 4H timeframes to daily chart;
  • You should avoid trading when the ribbon narrows as there can be many false signals;
  • You can use a reversal candlestick pattern to confirm your entry signal;
  • Like any other strategy, a Trader can lose, can win when trading with the middle Bollinger Band. The important thing is whether or not you make a profit