Last Updated on May 8, 2025 by Tim Morris

CCI Divergence Forex Bollinger Band Strategy

This is another bollinger Band system that trades on reversal. Applicable only to major pairs and works on 30 minute and 4 hour timframe.

Forex Indicators:

• Bollinger Bands
• 5 period Smoothed Moving Average set to High
• 5 Period Smoothed Moving Average set to Low
• Fibonacci Pivots THV

Indicator Sub Window 1

• 21 period CCI indicator
• Light Sea Green
• Thickness of 2
• 21 Period Bollinger Bands indicator
• Shift: 0
• Deviations: 2

Apply to First Indicator’s Data
5 Period Smoothed Moving Average indicator
Thickness of 2

Apply to First Indicator’s Data

Indicator Sub Window 2

• Volumes indicator
• Value Up: Green
• Thickness of 2
• Value Down: Red
• Thickness of 2

Entry Rules

Sell Trade Entry Rules

• Check if the SMMA channel is below the Middle Bollinger Band, if so, then the market is in a downtrend.
• You must determine the trend. refer to the 4 hour chart.
• Look at the 30 minute chart and wait for price to approach a Resistance area.
• If there are no price action patterns to trade, check to see if there is divergence present between Price and the CCI/BB/SMMA window on the 30 minute time frame.
• If either of the above criteria are met, check that there is high volume, that the Volume bar is forming significantly higher or consecutively higher peaks.
• If these conditions are met, enter a new trade position as soon as the candlestick pattern or divergence pattern has completed.
• Stop loss must be set at the most recent swing high.
• You can use trail your stop using the SMMA channel or middle Bollinger Band.
• Manual exit is also helpful, just refer to the Bollinger Band on the CCI (first indicator window) when it begins to contract.

Buy Trade Rules.

• Check if the SMMA channel is above the middle Bollinger Band, if so, then the market is in an uptrend.
• See it on a 4 hour chart.
• Look at the 30 minute chart and wait for price to approach a Support area.
• If there are no price action patterns to trade, check to see if there is divergence present between Price and the CCI/BB/SMMA window on the 30 minute time frame.
• If either of the above criteria are met, check that there is high volume, that the Volume bar is forming significantly higher or consecutively higher peaks.
• If these conditions are met, enter a new buy trade position as soon as the candlestick pattern or divergence pattern has completed.
• Stop loss must be set below the most recent swing low.
• Trail your stop using the SMMA channel or the middle Bollinger Band.
• You can also exit manually when the Bollinger Band on the CCI(first indicator window) begins to contract.

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