Last Updated on March 1, 2025 by Arif Chowdhury
Ever feel stuck trying to nail down the perfect trading strategy?
You’re not alone.
As a seasoned Forex trader since 2015, I’ve navigated the chaotic waters of the market.
I’ve explored fundamental and technical analysis, but the gold lies in the latter.
Today, I want to share a strategy that’s been a game-changer for me: The 21 EMA + Bollinger %B Strategy.
This approach isn’t just another fancy tool—it’s a proven method to spot breakout expansions and maximize profits.
What’s the 21 EMA?
The 21 Exponential Moving Average (EMA) is a trend-following indicator.
It helps you identify the direction of the market.
When the price is above the 21 EMA, it signals a bullish trend; when it’s below, it’s bearish.
Why 21?
This period strikes a balance between short-term fluctuations and long-term trends.
Understanding Bollinger %B
Now, let’s spice things up with Bollinger Bands.
Bollinger Bands consist of three lines:
- The middle line is the 20-period simple moving average.
- The upper and lower bands are calculated using standard deviations.
Bollinger %B shows where the price is relative to these bands.
- If %B is above 1, it’s above the upper band—time to consider selling.
- If it’s below 0, it’s below the lower band—time to think about buying.
How to Combine Them
Here’s how I mix the 21 EMA with Bollinger %B for spotting breakouts:
- Identify the Trend: Check if the price is above or below the 21 EMA.
- Look for Breakouts: Watch for %B moving above 1 (sell signal) or below 0 (buy signal).
- Confirm with Volume: Higher volume alongside these signals can validate your trade.
Why This Works
Statistically, about 70% of price movements happen within the Bollinger Bands.
When prices break out of this range, it often leads to strong trends.
This strategy capitalizes on that momentum.
I’ve backtested these methods for 20 years, and they hold up even in volatile markets.
My Trading Bots and This Strategy
Speaking of strategies, I’ve developed a portfolio of 16 sophisticated trading bots.
They’re designed specifically for major currency pairs like EUR/USD, GBP/USD, USD/CHF, and USD/JPY.
Each bot uses a blend of strategies, including the 21 EMA + Bollinger %B, to diversify risk and maximize profits.
- Diversification: Each currency pair has 3-4 bots tailored to minimize correlated losses.
- Long-Term Focus: My bots trade for 200-350 pips, which means they’re built for the long haul.
- Robust Performance: They’ve been backtested to perform exceptionally under harsh conditions.
Best of all, I’m offering this EA portfolio completely FREE.
If you’re looking to up your trading game, check out my 16 trading bots.
The Power of Breakouts
Breakouts are where the magic happens.
When the price breaks above resistance or below support, it often leads to significant moves.
This strategy helps you catch those moves early.
Fine-Tuning Your Strategy
Here are some additional tips to enhance your trading experience:
- Use Multiple Time Frames: Look at higher time frames like H4 to get a better sense of the trend.
- Risk Management: Always set stop-loss orders. Protect your capital.
- Stay Informed: Economic news can impact the market. Stay updated.
Choosing the Right Broker
Now, let’s talk about brokers.
Choosing the right forex broker is crucial for executing your strategies effectively.
I’ve tested and vetted some of the best in the industry.
Make sure to check out my top recommendations.
They offer excellent spreads, reliable execution, and robust customer support.
Wrapping It Up
The 21 EMA + Bollinger %B Strategy is a powerful tool for spotting breakout expansions.
It’s helped me navigate the forex markets with greater confidence and profitability.
Combine it with my 16 trading bots for a comprehensive approach to your trading journey.
You’ve got this!
Embrace the power of breakouts, and let’s see you thrive in the forex world.