Silver Trading: Advanced Three-Candle Confirmation Bollinger Band Strategy
Trading silver requires extreme patience and discipline. Traditionally profitable trading strategies don’t seem to work very well in silver. Professional traders have developed an advanced way of trading the silver with Bollinger Band and stochastic oscillator.
The upper and lower band of the Bollinger Band indicators acts as strong dynamic support and resistance level. Professional who buy and sell silver use this level to enter into the market with stochastic indicator confirmation.
Let’s see how the three candle Bollinger Band system is traded:
Figure: Trading the silver with advanced Bollinger band trading system
This system is pretty simple but very much profitable in silver trading. In the above figure, traders wait patiently to find three adjacent candles in the dynamic support and resistance level of the band. When three adjacent candles are spotted, touching the dynamic support of the band, professional traders look for stochastic confirmation. If the stochastic indicators remain in the oversold region with price trading near the Bollinger band support zone, traders go long in the silver.
It is imperative that the low of the three adjacent candles must lie at the same horizontal level of the dynamic support. On the contrary for sell entry, traders look for three adjacent candles below the dynamic resistance of the Bollinger band .If this condition is met, an oversold value of the stochastic indicators triggers the short trade in silver. Some professional traders use three candlestick confirmation pattern to trade the Bollinger band support and resistance level. Though the Advanced three candle confirmation strategy for buy and sell silver is very profitable yet trader shouldn’t risk more than 2% of their trading capital on any single trade. Lastly, this shouldn’t be traded under extreme volatile conditions of the market since the dynamic support and resistance levels are often broken in the event of the major economic news release.