The Bollinger Bands Histogram MT4 indicator is a variant of the traditional popular Bollinger Bands indicator.
The BB histogram indicator fluctates between two extreme levels (1.1 and -1.1) in a separate MT4 trade window.
The indicator draws bullish and bearish bars which are positioned above and below the 0.00 zero level.
BB histogram bars positioned above the zero mark are considered bullish while below bearish.
The BB histogram needs to be traded in conjunction with a trend following indicator to get the most out of it.
For instance, combine it with a 75 period exponential moving average, Parabolic SAR or a 200 period simple moving average.
First take a look at the overall trend, when it is up, only take bullish signals from the BB histogram forex indicator.
Conversely, when the general trend is down, only take bearish signals from the BB histogram forex indicator.
The default Bollinger period is set to 14. Feel free to change it to suit your needs.
The EUR/USD 1-Hour chart below displays the Bollinger Bands Histogram Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Bollinger Bands Histogram MT4 forex indicator are easy to interpret and goes as follows:
Buy Signal: Open buy trade when the BB histogram draws bars above the zero line (bullish signal). Be sure the overall trend is up. Confirm the trend with a trend following indicator.
Sell Signal: Open sell trade when the BB histogram draws bars below the zero line (bearish signal). Be sure the overall trend is down. Confirm the trend with a trend following indicator.
Trade Exit: Use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (Bollinger period) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Bollinger bands
Copy and paste the bb-histogram-indicator.mq4 into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)