Bollinger Band MA Crossover Breakouts by Ken Calhoun
This monthly column written by a professional daytrader and educator covers the general topic of breakout trading techniques. This month, he explains how you can use a particular combination of signals to help avoid false breakouts while gaining earlier, stronger indications for entering.
One of the most essential skills for successful breakout trading is to find charts that demonstrate a pattern of increasing volatility. How do you do that? One way is to use indicators. In addition to Wilder’s average directional index (ADX), you can use Bollinger Bands to help you see when volatility is on the rise. This month, I will show you how to use a simple two-step technical trading strategy to combine an early moving average crossover pattern with a classic Bollinger Band “squeeze” breakout trading signal.
TRADING STRATEGY: MA CROSSOVER WITH BOLLINGER BAND “SQUEEZE”
If you’re like many active traders, you may struggle with your entry timing because you saw a technical trading signal after the fact. It was too late to take action. The technique I’ll discuss here can help you avoid this common trading challenge...