Forex and Money Market

Have you ever heard of the BB Gun strategy? It’s a simple technique that some of the traders use when looking to make money in the foreign currency exchange. It uses two sets of Bollinger Bands versus MACD, hence the name BB Gun.

What these traders do is insert the first pair at the 2 standard deviation and the second one at the 3 standard deviation. They normally insert these indicators within a candlestick chart, as it’s rather easy for newbies to comprehend. This method can be used by anyone, whether they have a standard or a mini Forex trading account.

The idea behind the tactic is that the inner Bollinger Bands help you gage which currencies are about to retrace or reverse from the ongoing trend.

Often, the experts who use the BB gun strategy go long for instance when they see the currency prices touch the lower Bollinger Bands. And best of all, they apply the scheme to most of the favorite currencies like the shared currency i.e. EUR/USD; or the volatile ones such as the EUR/JPY and EUR/CAD. If you notice the crosses we’ve mentioned, they depict monetary units from different regions around the globe; hence, you can trade at the time that suits you best. For example some people lack the time to trade in the daytime, so they opt for the Asian session and choose pairs with the Yen. Others prefer the daytime hours and opt for crosses with the U.S. Dollar.

If you were to ask the Forex pros what’s the most valuable piece of advice they can share with you, they’ll tell you to adopt healthy Forex trends such as reviewing a chart prior to trading. Most of you have probably studied charts in one of the Forex courses. To become an expert trader, you need to practice how to read different time charts.

Begin by checking out the highest time frame and look for the overall trend. Use the Exponential Moving Averages to truly gage the currencies’ directions. Once you accomplish step one, go onto step 2. Find a candlestick pattern that indicates a possible currency trend reversal.

Third, plot a line through important support and resistance levels. Once you follow these steps, go onto a lower time chart and repeat the process. Make certain to follow the steps as you drill down through each of the smaller period charts.

After you identify the trend for each time period, you can catch the profitable moves. Remember that the higher charts have an important meaning for gaging overall trends.

Thus, if you see that the currency’s price may depreciate but by the same token the Stochastics reveal an oversold market, trust what you observe on the higher time charts. Opt for opening a position when both of them move in the same path.

The more you practice reading charts for currencies trading, the easier it will be for you to make money when conditions are just right.