This strategy combines two technical indicators with some strategies, the Relative Strength Index (RSI) and Bollinger Bands to generate and create a buy signal when the price is below the lower Bollinger Bands and a sell signal when the price is above the upper Bollinger Bands this is the main perspective. This strategy only triggers a trading signal when the RSI indicator and the Bollinger Bands indicator are both oversold or overbought which you can see.

First, discuss Bollinger bands and RSI

A Bollinger Band consists of mainly three lines plotted around a security’s price to capture its volatility and mention clearly so these are:

1. Center Line: This is a simple moving average for a specific period. For this strategy, the moving average is based on 30 candlesticks.
2. Upper and Lower Lines: These are placed two standard deviations away from the center line. The standard deviation measures the volatility, with these lines acting as dynamic resistance and support levels.

Trading with Bollinger Bands

A Bollinger Band trading strategy can signal entry and exit positions based on band expansion or contraction as well as price action behavior concerning the bands because price actions play a vital role in it as well.

The tightening of each band is called a Bollinger Squeeze and signals an impending breakout. This strategy works well when the market is moving sideways just because of tightening brands. When either the upper or lower band is tagged (touched), the principle of mean reversion applies, indicating a reversal. This strategy works well when the market is trending. Using M-tops and W-bottoms is another method of identifying trend reversals while trading with Bollinger Bands.

Relative Strength Index (RSI)

RSI is a momentum oscillator that measures the speed of its fast-tempered thing and changes in price movements as well. It oscillates between zero and 100 and is typically used to identify overbought or oversold conditions in a traded security it is somme how clearly understood here are some points:

1. Calculate the RSI value based on the set RSI and its parameters to start.
2. Use the Bollinger Bands formula to calculate the middle, upper, and lower Bollinger Bands for better management levels.
3. Determine whether the current closing price breaks through the upper or lower Bollinger Band.

Trading with Relative Strength Index Indicator

Standard oversold and overbought values are 70 and 30. However, you may change them to suit your trading strategy. Trading decisions are made as follows:

• When the oscillator lies between the limits eventually the market is considered flat, indicating a low short-term possibility of a trend reversal which is that it would reverse back.
• When the RSI value is above 70, the market is considered overbought and has shown some high rates as well. and it is seen as a good time to open short positions (sell) to take advantage of the reversal.
• When the RSI is below 30, the market is considered oversold, and you could go long (buy) which is what you should understand.
• Experts recommend you place stop loss and take profit orders at key Fibonacci levels and exit positions when the RSI signals that the market is moving opposite to the prediction.

For traders seeking minimal risk, trading within the band’s range is ideal. This strategy involves buying when buyers test the lower band and selling as they approach the upper band on its buying limits. By combining Bollinger Bands with support, limitation, and resistance levels, traders can improve their ability to identify potential market reversals that are all considered.

One approach is to wait for the price to move away from the middle band towards a support or resistance level while observing reversal candlestick patterns. These methods showcase how Bollinger Bands can be used in various trading situations and styles. It’s crucial to note that no strategy can guarantee success, so traders should combine these techniques with proper risk management and additional technical analysis to improve their trading outcome

Advantages

1. It combines two technical indicators, trend, and momentum, to comprehensively judge the market status.
2. Using two indicators as filter conditions effectively reduces the probability of false signals.
3. The code logic is clear and the parameter settings are flexible, suitable for different market environments and trading styles.

Strategic Risk

1. In volatile markets, this strategy may result in more losing trades.
2. Improper parameter settings may lead to poor strategy performance and need to be optimized based on actual conditions.
3. This strategy does not set a stop loss and may face a greater risk of retracement.

By combining trend and momentum indicators, the RSI and Bollinger Bands dual strategies can more comprehensively judge the market status and give corresponding trading signals. However, this strategy may not perform well in a volatile market, and no risk control measures have been set up, so you need to be cautious when using it in real terms. By optimizing parameters, introducing other indicators, and setting reasonable stop loss and profit, the stability and profitability of this strategy can be further improved.