Many traders are not very fond of the ranging market. It is quite difficult to predict the direction in which the market will go. The support and resistance levels are not of great help as well.
But ranging markets are not as calm as some can think. A certain level of volatility might be observed and this creates a good opportunity to trade short-lasting positions.
If you are interested in trading 1-minute candles on the ranging markets, stay with us. From this article, you will learn how to combine pinbars with Bollinger Bands at Olymp Trade and use them for trading positions of short duration.
Introduction to pinbars and Bollinger Bands
Pinbar is the name of a candle with a small body and a quite long shadow. The length of the shadow is at least two-thirds of the whole candle. We can distinguish between bullish and bearish pinbars.
The bullish pinbar’s shadow is aiming downward. The shadow of a bearish pin bar is pointing upward.
The candles called pinbars indicate an upcoming reversal of the trend. If you want to know more about them, make sure you read our guide all about pinbars.
How to use pinbars in combination with Bollinger Bands
As was said earlier, there are bullish and bearish pinbars candles. What is worth noting, bullish pinbars are not always green, nor bearish are always orange. The color alone won’t say is it a bullish or bearish candle. You will need to watch the shadows. If they are aiming down, it will be a bullish pinbar. If they are pointing up, it will be a bearish one.
Whenever you notice a bullish pinbar you can assume the trend will go up. In case of the appearance of a bearish pinbar, you have all rights to think the trend will move down.
And what is the entry point? Remember, you are using not only pinbars but also Bollinger Bands. What you need to look for, are the points of touching or crossing the external bands of the indicator with a bullish or bearish pinbar.
For instance, if you see a bearish pinbar intersects with the higher band of Bollinger Bands indicator, you must open a 1-minute lower position.
This situation usually takes place when the Bollinger Bands indicator is widening, which in turn is a sign of the growing trend. Let’s see how it looks like on the exemplary charts.
Trading with pinbars and Bollinger Bands on the Olymp Trade platform
Once you are logged into your Olymp Trade account, choose the asset and the Japanese candlesticks chart. Set 1-minute interval candles. Then hit the indicator feature and pick up Bollinger Bands in the unfolded menu. Check if the period is 20 and deviation 2. You have the possibility to change the color and the width of the lines simply by clicking a small pen icon.
Just to remind you, the places of interest are the points where the external band touches or crosses a pinbar. If it cuts through a bullish pinbar, open a 1-minute higher position. If the pinbar is bearish, place a 1-minute lower position.
To confirm the beginning of the trend watch if the gap between the bands of the indicator is expanding. You enter the trade when the pinbar is closing and the following candle is opening.
The trading strategy that combines pinbars with Bollinger Bands requires a certain portion of focus and commitment. But finding the points described above is quite easy, even if you are a beginning trader.
Example 1-minute trades on the Olymp Trade platform
Start with setting the duration for 1 minute. Then observe when the pinbar appears close to the bands of Bollinger Bands indicator.
The example below shows us four entry points for buy positions. In each case, the lower band intersects with the bullish pinbar. Immediately after its closing, you enter a 1-minute long position. You can also notice the widening of the space between the bands, which confirms the trend.
The following chart presents only 1 point where you should place a sell trade. The bearish pinbar is being intersected by the upper band. When the pinbar is fully developed you enter a 1-minute short trade.
Trading with a combination of pinbars and Bollinger Bands indicator at Olymp Trade is not difficult at all. You will learn it in no time. Just remember to try it first on the practice account. I would love to hear about your trading experience. Use the comments section which you will find further down the site.
All the best!
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