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How to Use the Bollinger Midline & 21 EMA for High Probability Entries?

Last Updated on February 23, 2025 by Arif Chowdhury

Are you tired of losing trades?

Do you feel overwhelmed by all the indicators out there?

I get it.

As a seasoned Forex trader since 2015, I’ve faced these challenges myself.

But let me share a powerful combination that can elevate your trading game: the Bollinger Midline and the 21 EMA.

Both are simple yet effective tools that can help you spot high-probability entry points.

Understanding the Basics

First, let’s break down these concepts.

Bollinger Bands consist of three lines:

  • The upper band
  • The lower band
  • The midline, which is the simple moving average (SMA) of the price.

The 21 EMA (Exponential Moving Average) reacts quicker to price changes than the SMA, giving you a more dynamic view of market trends.

Why Use This Combo?

  1. High Probability Entries: When the price approaches the Bollinger Midline, it often indicates a bounce back to the upper band.
  2. Trend Confirmation: The 21 EMA serves as a trend direction indicator. If the price is above the 21 EMA, it’s generally a bullish sign. If below, it’s bearish.
  3. Statistical Edge: Studies show that 70% of price movements revert to the mean, making this strategy a robust choice.

Setting Up Your Charts

Here’s how to set up your charts for success:

  • Add Bollinger Bands: Set the period to 20 and standard deviation to 2.
  • Add the 21 EMA: Keep it at the default setting of 21.

Identifying Entry Points

Now, let’s get to the juicy part: how to find those high-probability entries.

  • Look for Confluence:
    • When the price hits the Bollinger Midline AND is near the 21 EMA, you’ve found a sweet spot.
  • Check the Trend:
    • Is the price above the 21 EMA? Look for buy signals.
    • If it’s below? Consider sell signals.
  • Watch for Price Action:
    • Look for bullish or bearish candlestick patterns at these levels.
    • Patterns like pin bars or engulfing candles can confirm your entry.

Risk Management

Never forget the importance of risk management.

  • Set Stop-Loss Orders: Always place them just beyond the opposite Bollinger Band.
  • Use Proper Position Sizing: Risk only 1-2% of your trading capital on any single trade.

Diversifying Your Strategy

While the Bollinger Midline and 21 EMA are fantastic, I’ve found that diversifying your strategies can significantly improve your results.

That’s why I developed a portfolio of 16 sophisticated trading bots.

Each bot utilizes the Bollinger Midline & 21 EMA strategy along with other techniques to diversify risk and maximize profit.

These bots trade major pairs like EUR/USD, GBP/USD, USD/CHF, and USD/JPY.

With a robust system designed to handle long-term trades (200-350 pips), you’re looking at a solid way to automate your trading.

Curious? Check out my 16 trading bots portfolio for free—no catches involved!

Final Thoughts on Brokers

Before you dive in, make sure you’re trading with a reliable broker.

I’ve tested numerous platforms, and the best ones offer tight spreads, low commissions, and excellent customer support.

If you’re on the lookout for trustworthy brokers, visit Most Trusted Forex Brokers to find the right fit for your trading needs.

Conclusion

The Bollinger Midline combined with the 21 EMA can be a game-changer for your trading strategy.

By focusing on high probability entries and managing your risks, you can significantly improve your trading results.

And don’t forget to explore the power of automation with my 16 trading bots.

They are designed to help you trade smarter, not harder.

Happy trading! 🚀