Post of the Day: EUR/USD

[DailyFx]

Student's Question:

I see this indicator give a lot of correct signals in the range bound area of EUR/USD, used in conjunction with the candlesticks. I'm not sure that I would have placed all of these trades, but I circled all of the signals that turned out correct...would you agree?

Powercourse Instructor's Response:

Nice job on using a Daily chart for your analysis.

Yes. There were definitely a good number of correct "calls" provided by the Bollinger Bands. The general rule of thumb in trading with Bollinger Bands is to go short when the upper band is pierced and go long when the lower band is pierced. Given how this EURUSD pair traded in a range for several months accounts for the numerous signals on the posted chart.

Keep in mind that the highest probability trades will be those in the direction of the trend on the Daily chart.