How to use Bollinger Bands to assist waves count?

How to use Bollinger Bands to assist waves count?

Waves counting is an important tool to identify the price structure and help better timing the market entry.
Many traders might find waves counting is a mystery, subjective and waste of time.
Anyway, I often use it to see how the market structure.
I have a little help from a very versatile indicator ,The Bollinger Bands, Here is my steps;

This example is XAUUSD H1

Overlay BB indicator to the chart
Label 0 at the lowest low
Label wave 1 at swing high when it breaks middle BB (Best if it can break Upper BB)
Label wave 2 at swing low the price breaks middle BB (Best if it can break Lower BB )

Now,we can see wave 3 emerges when price breaks out from the high of wave 1
wave 3 price candlestick keeps closing near the upper BB

When the price retraces and closes to below middle BB again we can expect the wave 3 to end and can label the wave 4
However, wave 3 can be extended when the price move back quickly to the Upper BB.
In this example, the price moves below the Lower BB then the wave 4 is label

Last one is wave 5 label when the price protrudes the Upper BB again.


Tanakorn Koomrampai, CMT®, CFTe®

Disclaimer : This is my personal view, not the trade recommendation. It's for educational purpose only.