Target Bands Indicator

Target Bands Indicator is a short-term swing trading indicator. It closely monitors the changes in price action over the selected period of data and calculates it to define the overbought/oversold areas of the market.

Once such an area is confirmed, it plots star circles as trade signals according to the market momentums. Target Bands work on all kinds of forex currency pairs but suits well with shorter timeframe charts like M5 & M15.

Target Bands Indicator is quite easy to understand and apply since it uses a very simple technique to demonstrate the trade signals. As a simple indicator, it offers good advantages for the newbie swing traders.

Target Bands Indicator Overview

After the installation of the Indicator at the mt4 platform, your trading chart will appear like the following image:

Target Bands Indicator Overview

Target Bands Indicator Explanation

Target Bands Indicator applies a 55-day moving average calculated based on the weighted close method and uses a deviation in order to plot the upper and lower bands of the indicator.

The upper band represents the overbought area of the market – a place where sellers go for short entries and buyers exit from long trades.

Target Bands Indicator Explanation

The lower band is the area of the oversold level of the market where buyers would like to go for long entry and sellers would like to exit from short positions.

For better understanding, the indicator plots star circles around the price candles as trade signals.

Target Bands: Buy Conditions

Target Bands Buy Conditions
  • Price hits the lower Target bands
  • A star circle is plotted below the price candle at the same time
  • A buy can be triggered right above the lower Target bands
  • Set stop-loss right below the oversold area
  • Exit long/take profit whenever price hits the overbought level and a star circle is plotted above the price candle’s high

Also Try: XM Forex Broker

Target Bands: Sell Conditions

Target Bands Sell Conditions
  • Price hits the upper Target bands
  • A star circle is plotted above the price candle at the same time
  • A sell can be triggered right below the upper Target bands
  • Set stop-loss right above the overbought area
  • Exit short/take profit whenever price hits the oversold level and a star circle is plotted below the price candle’s low

Get E-Book Worth $100 for Free!!!
in your inbox

Thank you for subscribing. Check your mailbox

Something went wrong.

I have been actively trading stocks and currencies since April 2012. Besides trading with my personal money I am a technical analyst in a mutual fund which has Rs. 1 billion in assets under management. At my leisure, I love attending live music, traveling, and partying with friends.

Leave a Comment