The Bollinger Bands Squeeze with MACD forex indicator for MT4 looks a bit similar to this one, but is based on Bollinger Bands together with the popular MACD indicator.
The indicator draws green, blue and red histograms on the Metatrader 4 chart.
- Blue histograms are considered to be neutral areas. Price action is flat or range-bound.
- Green histograms are considered to be bullish. This could be a signal to go long the currency pair.
- Red histograms are considered to be bearish. This could be a signal to go short the currency pair.
This indicator works well for short-term trading such as scalping and day trading.
For swing trading purposes, use it together with a trend following indicator.
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Indicator Chart (AUD/USD M5)
The AUD/USD 5-Minute chart below displays the Bollinger Bands Squeeze with MACD Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Bollinger Bands Squeeze with MACD MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Initiate a long trade when the indicator starts drawing green histogram bars above the zero level (bullish price action).
Sell Signal: Initiate a short trade when the indicator starts drawing red histogram bars above the zero level (bullish price action).
Blue bars: Do nothing or stick with your open position until the signal reverses from buy to sell or sell to buy.
Trade Exit: Use your own method of trade exit.
Bollinger Bands Squeeze + SuperTrend MTF Strategy for MT4
This MT4 strategy combines the breakout momentum from the Bollinger Bands Squeeze with MACD indicator with the trend confirmation provided by the SuperTrend MTF Forex Signal indicator.
The Bollinger Bands Squeeze identifies periods of low volatility that often precede strong price movements.
Green histogram bars above zero indicate bullish pressure, while red bars above zero indicate potential bearish reversals.
The SuperTrend MTF indicator confirms the prevailing trend.
A green line signals a buy trend and a red line signals a sell trend. This combination ensures entries align with both momentum and trend direction.
The strategy works well on M5, M15, and H1 timeframes and is suitable for traders looking for clear breakout entries with trend validation.
It is particularly effective on major currency pairs and highly liquid cross pairs.
Buy Entry Rules
- Wait until the Bollinger Bands Squeeze starts drawing green histogram bars above zero, indicating bullish momentum.
- Confirm that the SuperTrend MTF line is green, signaling a buy trend.
- Open a long trade at the next candle open after confirmation.
- Place a stop loss below the recent swing low or just under the lower Bollinger Band.
- Set take profit at the next significant resistance level, previous swing high, or round number.
- Optionally use a trailing stop if the bullish trend remains strong.
Sell Entry Rules
- Wait until the Bollinger Bands Squeeze shows red histogram bars above zero, signaling potential bearish price action.
- Confirm that the SuperTrend MTF line is red, indicating a sell trend.
- Open a short trade at the next candle open after confirmation.
- Place a stop loss above the recent swing high or the upper Bollinger Band.
- Take profit at the next support zone, previous swing low, or psychological level.
- Use a trailing stop if downward momentum continues.
Advantages
- Combines volatility breakout with trend confirmation for higher probability trades.
- Works across multiple timeframes and currency pairs.
- Flexible take profit options allow adaptation to market conditions.
- Suitable for intraday scalping as well as short-term swing trades.
Drawbacks
- Trend confirmation may lag slightly, potentially delaying entries.
- Few trades occur because both momentum and trend conditions must align, which may not satisfy aggressive traders.
- Trailing stops require judgment, so beginners may struggle to apply them consistently.
- Sudden news events can trigger false breakouts or trend reversals.
Case Study 1
On EURUSD M15 during the London session, the Bollinger Bands Squeeze began drawing green histogram bars above zero after a brief consolidation.
The SuperTrend MTF line turned green at the same moment.
A long trade was opened at the next candle. Stop loss was placed 12 pips below the recent swing low.
Price rallied steadily over the next hour and reached a previous resistance level, giving a profit of 29 pips.
The trade followed all entry rules, confirmed momentum, and aligned with trend direction.
Case Study 2
On GBPJPY H1, price was consolidating inside Bollinger Bands.
The histogram turned red above zero and the SuperTrend MTF line switched to red, confirming bearish momentum.
A short trade was entered at the next candle. Stop loss was placed 15 pips above the recent swing high.
The pair moved downward toward the next H4 support area, achieving a 38 pip profit.
Strategy Tips
- Wait for both the histogram and SuperTrend line to confirm before entering a trade.
- Prefer trading during high liquidity sessions to maximize breakout potential.
- Adjust stop loss and take profit levels according to the timeframe and volatility of the currency pair.
- Use a trailing stop to lock in profits when the trend remains strong.
- Track which pairs and timeframes produce the most consistent results and focus on those setups.
- Limit daily trades to only the highest-quality setups that meet all entry criteria.
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Download the “bollinger-squeeze-with-macd.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (trigger type, stochastic period, cci period, MACD fast, MACD slow, Momentum, RSI 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
