In this tutorial, the presenter demonstrates a straightforward trend‑following trading system that combines two technical indicators: Bollinger Bands (period 21, deviation 2, applied to close) and a 200‑period exponential moving average (EMA, applied to close, displayed in red). He walks through the step‑by‑step process of adding and configuring each indicator on a chart, explains how Bollinger Bands serve as dynamic support and resistance levels, and describes how the EMA defines the overall market trend—price above the EMA signals an uptrend, price below signals a downtrend. The core trading rules are: when price is above the EMA, look to buy near the lower Bollinger Band (support); when price is below the EMA, look to sell near the upper Bollinger Band (resistance). Trades are only taken when all three bands (upper, middle, lower) lie on the same side of the EMA to avoid false signals. The presenter also notes common pitfalls such as price touching a band without reversing, and emphasizes testing the strategy on a demo account before live trading. The video concludes with an invitation for feedback and a wish for profitable trading.
Chapters
Hello and welcome to this special series. In this video, I would be sharing with us a very simple and easy-to-use trend trading strategy. With this strategy, we are going to be utilizing 2 trend indicators, that's the Bollinger Bands and the moving average. Quickly, I will show us the settings of these 2 indicators. For the Bollinger Band, we'll change the period to 21. The default period is 20, but for this strategy, the 21 period works better. We'll still leave the deviations as 2, which is the default settings. The shift still 0, and apply to close. The second indicator we'd be utilizing is the moving average, and for the moving average, our period is going to be 200. The method is exponential, and we also apply to close, and the style is red. So quickly, I will add these 2 indicators, um, to the charts now so I can get to explain to us how we will be using this strategy to trade in the market. To add the Bollinger Bands to our charts, we locate indicator list This way, I tap on it. I go to trend. Then I pick the Bollinger Bands this way. I edit the period if what I was having there initially was not twenty-one. So I did it twenty-one, and the deviation should be two. Apply to close. The shift still zero, and my style—that's the color I would like the Bollinger Band to assume. So whichever color I like, maybe. Blue, or I can just type in the blue this way, and then blue comes up automatically. Depending on the thickness I would like to have on my Bollinger Bands, I can also choose the thickness this way, and then I click OK. So the Bollinger Band, as we have it, is mostly used by trend traders, especially those who regard it as some support, especially the outer bands. As the support and the resistance. Like this outer band, the upper band is regarded as resistance, and this lower band is regarded as the support with the Bollinger Band. You know, at resistance you are expecting price to trade to the downside, and around support you should be expecting price to bounce to the upside. But there are some limitations with the Bollinger Bands because sometimes you get to see price touching the lower band like here, but instead of price bouncing back up, price continues to trade to the downside. So what can we now add to this Bollinger Band to make, uh, the strategy, or to make the signal we are going to be seeing on our charts more profitable than just using strictly Bollinger Bands? And that's what prompts me to test the Bollinger Bands with 200 exponential moving average. So how do I add that? I also, um, go to indicator list, move to trend, because the 2 of them are trend indicators. So they are trend following indicators. They help us to trade in line of the trend on the instrument. And there is this common saying that as a trader, the trend is our friend. So if you're able to get very good trend indicators that can tell us the trend of a particular instrument, all we have to do is just to follow the trend and we see ourselves doing reasonably well in the market. So I moved to moving average and I did as follows. I changed the period to 200, the MA method to exponential Apply to Close, and the style, the color red. I decide to go with color red so I would be able to distinguish between the Bollinger Bands and the moving average. So it's not good for us to have the same colors for the Bollinger Bands as well as, um, the moving average. So at the end, I can click on OK. Then I get to see, uh, the moving average. Maybe I should also increase, uh, the thickness slightly. Um, second level this way, then okay. So it's a bit thick now. So how are we going to be using this strategy? Uh, first of all, let me quickly explain how this moving average works. Uh, we could see this red line, which is the moving average, uh, across our charts, and at some point we could see price trading above the red line, which is our moving average. And at another time, you could see price trading below the moving average. So when price trades above the moving average, that is telling us that at that particular point in time, the trend on that instrument is up. We should be looking at buying. We should be looking at buying since the trend is up. We will continue to look for opportunities to buy on this instrument. And whenever the instrument is trading below the 200 exponential moving average, as we have around this At those periods, we are going to be looking out for opportunities to take sell trades. Um, yeah, so that's the way it works. Checking this side of, um, the charts, when price was able to trade above the exponential moving average, meaning the moving average at that time, the 200 exponential moving average, should be acting as a support to price. And we have, uh, support and resistance also on our Bollinger Bands, and we want to get good trades in line of the trend in the market. So the best thing for us to do whenever price is trading above the 200 exponential moving average is to be buying from support on the Bollinger Bands. So whenever price is able to come to the support zone on the Bollinger Bands, we will be taking buy trades. Once price comes to the support levels or the support bands on the Bollinger Bands, we take a buy trade. And if price is trading below the 200 exponential moving average, suggesting taking sell trades, we will also take, take sells when price is touching the resistance band on the Bollinger Band, uh, like around this level when price was able to trade to around the upper band. We would have clicked a sell, but we will not click buy here, also here, also here, but though price was at support. Because the exponential moving average tells us the direction of the instrument, and at this time price is generally below the exponential moving average, we will only sell and not buy. But currently, around where price is trading, one of the bands has made its way outside of the moving average. So that means currently we will not use this strategy to take trade. We will only use it when all of the bands are either below the moving average or above the moving average. That's very important information for us to take note of while using this strategy. So I look forward to getting our feedback on this strategy. Let's try to test it out on our demo. Let's see what the result is going to look like. And I wish us a very profitable, uh, session using this strategy. Um, to trade. Thank you. Enjoy your day.
