There are not only Bollinger Band channels, but also many channel systems that are very easy to use.
You have to make the best match according to your own trading habits and usage of the trading system.
Many Huiyou are using the Vegas channel, which is derived from the exponential moving average and the Fibonacci sequence. It can be mainly used to filter market breakthroughs, and the signals are relatively accurate.
Today Hui Classroom will introduce this channel system to you.
Introduction to Vegas channel principle
The Venus channel system involves 3 exponential moving averages (EMA), which are 144EMA, 169EMA and 12EMA. The first 2 moving averages form a Vegas tunnel, and the 12EMA is more responsive to price, acting as a filter for market breakouts.
The reason for using the 144 moving average and the 169 moving average is that on the one hand, it can reflect the short-term to medium-term signals of the market, and on the other hand, both 144 and 169 conform to the Gann square theory.
But there is a limitation. In order to avoid too many error opportunities given by too small a time period, it is not easy to see the progress of the market in a larger time period. Currently, the system uses a 1-hour period.
Both the 144 moving average and the 169 moving average can serve as the upper and lower rails of the tunnel. The upper rail represents the market resistance level, and the lower rail represents the market support level. The trading method of this channel is naturally to use the market price to break through the upper and lower tracks.
But unlike other channel systems, it works better with the Fibonacci ratio. The following Fibonacci integers are often used to calculate the target take-profit level: 55 (representing 55 points), 89, 144, 233, 377. When the market trend is as expected, you will sequentially harvest profits in the corresponding position.
When the market price reaches the last 377 points, it means that the market trend will reverse.
This system can be combined with the moving averages that come with MT4/MT5. First insert the technical indicators - select Moving Average, modify the time period to 144 and the moving average type to Exponential; also insert the 169 moving average, and modify the corresponding time period and exponential movement mean line.
If the price breaks through the upper track, you need to add the above-mentioned Fibonacci points at the moving average level of the upper track; if the price breaks through the lower track, you need to add Fibonacci points at the moving average level of the lower track. Note that when adding horizontal bits in the lower track, the corresponding values are negative. The specific adding method is shown in the figure below:
How to apply Vegas access
In an upward trend, the Vegas channel supports the market price, and in a downward trend, the Vegas channel exerts pressure on the market price.
If the width of the Vegas channel is small and there is no obvious upward or downward trend, it indicates that the market may be in a state of shock, and you can wait and see first.
The best way to trade is to use the breakthrough of the Vegas channel to make orders! Methods as below:
Using the Vegas channel, there are more aggressive trading methods and insurance methods, which can be selected according to personal trading style and risk tolerance.
More aggressive trading methods:
When the market price breaks through the upper track of the tunnel, go long, set a take profit at the Fibonacci point, and set a stop loss at the previous Fibonacci point; when the market price breaks through the lower track of the tunnel, go short, take profit and stop loss The same way as above.
Conservative trading approach:
The breakthrough of the market price must be verified by 12EMA before entering the market. Although the entry signal is slower, it is relatively safe. 12EMA acts as a breakthrough filter line. If the price breaks through the tunnel but the filter line does not break through, it will be regarded as a false breakthrough and the breakthrough will be invalid. Only when the filter line breaks through the tunnel is it considered a true breakthrough. The target take profit level does not necessarily have to be set at every Fibonacci point.
In addition to direct trading, Vegas channel can also add other auxiliary technologies by changing the moving average cycle. For example, in the 1-hour time frame, the 144 and 169 moving averages of 4 times are commonly used to see the trend.
The above is the introduction about the Vegas channel. The channel that combines the two classic systems is relatively easy to use. Of course, if you study hard, there are many usages. Just a reminder, you have to suit your own trading style. If you do minute lines, you may not be able to adapt to this system.
For example, there is a Vegas channel turtle trading template circulated in the currency circle, in which the Vegas channel acts as a filtering breakthrough signal. The specific usage is as shown in the figure below. If you need this system, you can get it by replying "Vegas Turtle Trading" in the official account dialog box. The 4-hour time frame is used here, and the 144 moving average and the 169 moving average need to be added by yourself!
Add
