It is always important for currency traders to understand the current market conditions as this will enable them know the best strategy that should be used.
The Volatility Bars Metatrader 4 Forex indicator tells us whether the market is volatile or quiet.
So, you can deploy the most profitable forex trading strategy or system, either for a volatile or quiet market.
See our example chart below with the Stochastic oscillator.
Basically, the indicator appears in the form of blue histogram bars.
When the market session is volatile, the blue indicator histogram bars tend to rise, while they are seen to decline during quite market conditions.
The GBP/AUD M30 chart below displays the Volatility Bars + Stochastic Oscillator Metatrader 4 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when price has reached bottom and the Volatility Bar histograms are in the upper end region scanning for buying opportunities.
Wait for the Stochastic indicator to hit the oversold region and when the %K Line crosses above the %D Line buy.
Sell Signal: Go short when price has touched its high and the Volatility Indicator2 histograms are in the upper end region scanning for selling opportunities.
Wait for the Stochastic indicator to hit the overbought region and when the %K Line crosses below the %D Line sell.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the Volatility Indicator2 histograms are in the lower end region.
Exit sell trade: Close all sell orders if while a bearish trend is running, the Volatility Indicator2 histograms are in the lower end region.
Tips: The Volatility Bars indicator cannot be deployed as a standalone technical tool, hence the reason we added the Stochastic indicator to its setup rules.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (MaPeriod, value), width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the volatility-indicator-2.ex4 indicator 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)