The foreign exchange market comprises of four major currency pairs. These pairs belong to major currency markets in developed nations of every continent. As these market time zones overlap with one another; traders expect cut-throat competition. This is why numerous investors use trading robots. For instance, you can use eurusd Forex robot in navigating American and European economies.
The advanced and intuitive software applications help traders place trades and implement market strategies. Currency trading involves a lot of minute actions. These small activities vary from something as simple as choosing a currency pair to complicated trend analysis calculations.
A good Expert Advisor, which utilizes MetaTrader platform, can support you in executing all these decisions. And you can apply tested techniques like Bollinger band strategy, through these bots.
What is Bollinger band technique?
Originally designed by John Bollinger in 1980s, this technique employs standard deviation along with moving average. In fact, you usually plot the bands two standard deviations away from a simple moving average.
If your currency pair’s price touches upper band, then you can say that market is overbought. Similarly, if that price hovers near lower band, you will say that its oversold market. Users can design their currency bots in a way that they can implement Bollinger’s rules and regulations.
How to use robot Forex eur usd with Bollinger bands?
The EUR/USD currency pair is a highly sought after pair in Forex. It relates two very powerful economies. On the one hand, there is the European Union’s euro and on the other hand U.S dollar. Both these currencies influence international economic conditions. So, analyzing this currency pair is vital.
Example: - Joey trades in USD/EUR currency pair. He wants to use Bollinger bands as a way of monitoring prevailing trends. Here, he should use his investing EA and establish a simple moving average; which bases itself on market data. From here, that app will help Joey gauge upper and lower bands through standard deviation.
So, as you can see, implementing Bollinger bands is not rocket science. But as an investor everybody must learn some core Bollinger band philosophies to grasp the intricacies of eurusd Forex robot.
What are some important core concepts of Bollinger bands?
Following are some important philosophies of this investment technique;
- The squeeze:
It is a fundamental concept in Bollinger band technique. When both upper and lower bands come close to each other, they restrict moving average. This is the squeeze phenomenon. Usually, seasoned investors believe a squeeze can mean lower volatility. But in future, the situation will flip.
If you use an EA program, it will show that majority of price actions occur within upper and lower bands. But sometimes users find a few outlier situations. Experts call these anomalies breakouts.
Now a breakout is a major event, but it does not signify buy or sell option. As an investor, you should program your application accordingly.
In the end, it seems that Forex applications are highly versatile equipment. You can use eurusd Forex robot or any other application while applying different techniques like Bollinger bands, Stochastic models, etc.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.