Guide to Trading with Bollinger Bands and

Support/Resistance on IQ Option

One of the advantages of using candle stick charts is that they can be used alongside many
different technical indicators. In this guide, I'll teach you how to use Bollinger Bands alongside
support and resistance levels to trade on the IQ Option platform. This trading strategy is used to
trade trend reversals. Let's get started.

What must you know first?

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What must you know first?

Before trading using Bollinger Bands and support/resistance on IQ Option you must have some
prior knowledge about these two technical indicators. I have created detailed guides which
cover them.

The Guide to trading using Bollinger Bands on IQ Option will get you started with the Bollinger
Bands indicator. Next, you can read the Guide to Trading using Support and Resistance on IQ
Option.

As a bonus, you should also read the Guide for trading using Candles on IQ Option. Now that
you've read the three guides, let's start trading using Bollinger Bands alongside support and
resistance on the IQ Option platform.

Guidelines for trading using Bollinger Bands alongside Support

and Resistance
The first thing to do is to select one currency pair. I usually use the EUR/USD pair to trade.
Second, trade a specific time frame. You should choose to trade on specific days and at specific
time intervals.

This is when your chosen currency pair doesn't have a lot of volatility making it easier to follow
market movements. Third, I'll trade 1 minute candles and trades will also last 1 minute only.

Finally, I'll employ a simple money management strategy. Each trade will have a $10
investment. The expected return per trade is 80%. Here's a chart showing my money
management strategy.

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Money management on IQ Option

When using the Bollinger Bands alongside Support and Resistance, I'll only enter a trade when
the trend reverses. The following rules will apply. Enter a buy order: When the price falls below
the lower band on a downtrend and breaks out of the support level.

This is signaled by a long bearish candle that breaks the support. It's followed by a long bullish
candle. Once the price breaks the support on the bearish candle, I'll immediately enter a buy
position lasting 1 minute.

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Enter buy position when price breaks support

Enter a sell order: When the price rises above the upper band on an uptrend and breaks out of
the resistance. This is signaled by a long bullish candle followed by a long bearish candle. As
soon as the price breaks the support and goes above the upper band, I'll immediately enter a
1-minute sell position.

Enter sell position when price breaks resistance

Steps for trading using Bollinger Bands and Support/Resistance

on IQ Option
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Set up the Bollinger Bands indicator on your 1 minute candles EUR/USD
chart

After logging in to your IQ Option account, set up the EUR/USD candles chart with 1 minute
intervals. Next, set up the Bollinger Bands indicator as follows: Click on the indicators feature
and select volatility.

Finally, select Bollinger Bands. To set up the support and resistance levels, use horizontal lines
selected from the graphical tools feature on your IQ Option trading interface.

Set up Bollinger Bands on IQ Option

Focus on when the candle starts developing

In our trade entry rules above, you'll only enter a buy or sell trade whenever the price breaks out
above or below a support or resistance. In addition, the price should also break above or below
the upper or lower bands.

It's therefore important that you look at where exactly this happens. As the next different colored
candle starts developing, enter your trade based on this candle color. Your trades should last 1
minute.

My trades as they occurred on 10 February on the IQ Option platform

From 12.00 to 14.00

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4 entry points using Bollinger Bands and support/resistance

During the first session, I saw 4 entry points. The first entry point showed a long bullish candle
and I entered a sell order immediately the bull candle ended. This trade lost because the
uptrend wasn't completely exhausted.

The second entry point occurred when the long bullish candle broke the upper resistance line. It
also slightly broke the upper band. I immediately entered a 1 minute sell order. This was a
winning trade. The third entry point occurred when the price fell under the lower band.

Notice I didn't have a support level drawn here. But relying on the break under the lower band, I
immediately entered a 1 minute buy position which was a winner. The fourth and final entry
point occurred when the price also broke through the support. It also fell under the lower band. I
entered a 1-minute buy order which as a winner. From 13.30 to 14.00

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1 entry point using Bollinger Bands and support/resistance on IQ Option

Before my 13.00 to 14.00 trading session ended, I found only 1 entry point. This was during the
downtrend. Notice the first false entry point? Here, the prices fell below the lower band.
However, the reversal was pretty minimal and I decided not to take the risk. The true entry point
occurred where the price fell below the support and the lower band. Here, it was safe to enter a
1 minute buy position which turned out a winner.

An analysis of the effectiveness of this trading strategy

It's hard to trade it with 1 minute intervals

Although I used 1 minute candles to trade in my examples, I usually recommend trading longer
candle intervals (5 minutes or more). 1 minute intervals have too many fluctuations such that a 2
second fluctuation can result in a trade going against you. The 5 minute or longer intervals,
however, makes it easy to spot possible entry points when using this strategy. 1 minute
intervals, on the other hand, show more trend reversals per given session. That's the only
reason why I used it in my examples.

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1 minute intervals difficult to trade with

It works best when trading trend reversals

The objective of using Bollinger Bands alongside support and resistance it to identify possible
trade entries where trend reversals occur. This makes it an efficient strategy for trading even
when markets are affected by news items. All you need to analyze are the candle patterns.

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Trading trend reversals

In some instances, trend reversal doesn't occur immediately or the reversal is too minimal to
result in a winning trade. Remember my first trade? It therefore requires a bit of patience
studying the price charts to identify the best trade entry points.

You will get very few trade entry points

At times, you'll get several good entry points in a trading session. But in most instances, your
entry points will be few and scattered. However, many of these will give the right signals
resulting in winning trades.

Advantages of using Bollinger Bands alongside Support and

Resistance to trade on IQ Option
High probability of winning trades

One thing that sets this strategy apart is that has a very high probability of winning trades. I
recommend you test this out on your IQ Option practice account. The reason for this is that
you're essentially using 2 indicators alongside candles. In addition, you should only enter into a
trading position when specific conditions are met.

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High probability of winning trades

All you need to do is study the price charts, draw your support and resistance levels and wait for
prices to cross these lines before entering a single trade.

A good strategy to build patience

Patience is one of the most essential skills every trader must develop. If you rely on this strategy
to make money, you're likely to spend hours waiting for the right conditions to present
themselves. Once you've developed patience using this strategy, making money on IQ Option
becomes quite easy.

Proper money management keeps your account healthy

If you look at my money management chart above, you'll notice that my intention is to trade $10
on each trade. If I had $200 in my account, I'd have to get 20 consecutive losing trades for my
account balance to become depleted.

However, given the high winning odds of this strategy, it's very unlikely that your account will
become depleted.

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Trading account won't get burned

As a beginner trader, your main goal should be ensuring that your account balance doesn't drop
beyond say 20%. Once you've managed to do this, your next goal should be growing your
account balance with a certain percentage every month. That's how many successful traders
manage to remain in the game.

Trade and make your own conclusions about trading Bollinger

Bands alongside Support and Resistance
I used 1 minute candles to trade using this strategy on IQ Option. However, I advise you to use
longer time frames to get better results. Start by trading on your IQ Option practice account.
Make notes about how well or poorly this strategy fits in with your trading style.

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Make your own conclusions about trading with this strategy

Find the best time to trade a specific instrument. Practice sound money management
techniques. Most of all, be patient and wait for the right conditions to present themselves. Good
luck!

Need help with trading?

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 Read the original article at:
https://www.iqoptionwiki.com/bollinger-with-support-resistance-strategy/

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