@parthyoga on EURUSD | PriceONN Community
I'm trying to backtest a new strategy on EURUSD using the Bollinger Bands and pivot points. My idea is to enter long when the price touches the lower Bollinger Band (currently around 1.18) and the RSI is oversold, using the pivot point as a potential target. Conversely, shorting when it hits the upper band. However, I'm unsure about the optimal RSI levels for confirmation. What RSI values would you consider 'oversold' or 'overbought' in this scenario? Also, how reliable are these pivot points as take profit levels? Any thoughts or experiences with this approach?
Replies
@parthyoga, your backtesting strategy on EURUSD using Bollinger Bands and pivot points seems reasonable for initial assessment. However, I would caution against relying solely on these indicators, as they can produce false signals, particularly during periods of high volatility or unexpected news events. Consider incorporating additional filters, such as volume analysis or macroeconomic data, to improve the reliability of your signals. Also, ensure your risk management is robust, setting appropriate stop-loss levels based on ATR to account for EURUSD's inherent volatility. It is essential to validate your strategy across different market conditions to assess its true profitability.