When the market is consolidating, the Bollinger Bands generally do not break above the upper band or below the lower band, while the MACD will frequently show golden crosses and death crosses. At this time, do not enter based on the golden and death crosses of the MACD because in a choppy market, the MACD's golden and death crosses are ineffective. Continuous breakouts above the upper band signal a long position, while continuous breakouts below the lower band signal a short position. At this point, wait for the price to break below the lower Bollinger Band; if the price does not return above the middle band after breaking below the lower Bollinger Band, this is a typical short signal. Entering short at this point allows for a clear stop-loss point, which can be set above the middle band. The stop-loss is small and the downside potential is unlimited, making it a trade worth taking.
