The Anchored VWAP Channel indicator for Metatrader 4 provides solid trading signals and is based on the volume-weighted average price.
The indicator consists of 3 colored channel lines (orange, dotted gray, blue) and appears in the main chart window.
Key points:
The overall trend is considered upwards when the channel is sloping up.
Likewise, the overall trend is considered downwards when the channel is sloping down.
Buy & Sell Trade Example
- A new buy signal occurs when the candlestick closes above the orange VWAP channel line and the channel is sloping upwards.
- A new sell signal occurs when the candlestick closes below the blue VWAP channel line and the channel is sloping downwards.
Feel free to experiment with the different indicators’ input settings to suit your needs and preferences.
Free Download
Download the “Anchored VWAP Channel.ex4” MT4 indicator
Indicator Chart (EUR/USD H1)
The picture below shows the Anchored VWAP Channel Forex indicator in action on the EUR/USD H1 trading chart.
Trading Tips:
Always trade the Anchored VWAP Channel in the direction of the overall trend.
Place a stop loss above or below the most recent swing high or low price.
The indicator can be used as a standalone trading tool for both trade entry and exit.
This technical indicator can work together with any existing trading strategy or system for additional trend confirmation.
Anchored VWAP Channel + Scalper Signal Forex Scalping Strategy for MT4
This scalping strategy combines the Anchored VWAP Channel Indicator for MT4 and the Scalper Signal MT4 Indicator.
The Anchored VWAP Channel shows bullish bias when the price is above the channel and bearish bias when the price is below.
The Scalper Signal indicator provides green arrows for buy signals and red arrows for sell signals.
Combining these two indicators allows traders to capture high-probability scalping trades on M1 and M5 charts.
This strategy works best on major currency pairs such as EUR/USD, GBP/USD, and USD/JPY during active trading sessions.
It is designed for scalpers who prefer quick trades with clear entry and exit signals.
Buy Entry Rules
- Ensure price is above the upper band of the Anchored VWAP Channel, confirming bullish bias.
- Wait for a green arrow from the Scalper Signal indicator.
- Enter a buy trade immediately after the green arrow appears.
- Place a stop-loss a few pips below the recent swing low or below the channel boundary.
- Set take-profit for a small pip target (5–10 pips on M1, 10–15 pips on M5) or exit when a red arrow appears.
Sell Entry Rules
- Ensure price is below the lower band of the Anchored VWAP Channel, confirming bearish bias.
- Wait for a red arrow from the Scalper Signal indicator.
- Enter a sell trade immediately after the red arrow appears.
- Place a stop-loss a few pips above the recent swing high or above the channel boundary.
- Set take-profit for a small pip target (5–10 pips on M1, 10–15 pips on M5) or exit when a green arrow appears.
Advantages
- Combines trend bias from VWAP channel with precise entry signals from arrows.
- Clear rules make it easy to follow for scalping traders.
- Works well on M1 and M5 charts with major pairs during active sessions.
- Helps avoid counter-trend trades by confirming bias before entry.
Drawbacks
- High-frequency trading requires quick decision-making and discipline.
- Small pip targets per trade require multiple successful trades to generate profit.
- Signals may be less reliable in low-volatility or choppy markets.
- Stop-loss and take-profit placement is critical to avoid frequent losses.
Example Case Studies
Case Study 1 – EUR/USD M1
At 14:32 GMT, EUR/USD closed above the upper VWAP channel band at 1.0980, confirming bullish bias.
The Scalper Signal showed a green arrow at 1.0984.
A buy trade was entered at 1.0984. Stop-loss was set at 1.0978 (6 pips risk).
Price rose to 1.0993 within 8 minutes, achieving 9 pips profit. Trade was closed when a red arrow appeared.
Case Study 2 – GBP/USD M5
At 11:15 GMT, GBP/USD fell below the lower VWAP channel band at 1.2520, confirming bearish bias.
The Scalper Signal showed a red arrow at 1.2516. A sell trade was entered at 1.2515.
Stop-loss set at 1.2530 (15 pips risk).
Price dropped to 1.2498 over 20 minutes, generating 17 pips profit.
Trade exited when a green arrow appeared.
Case Study 3 – USD/JPY M1
At 09:47 GMT, USD/JPY rose above the upper VWAP channel band at 148.50, indicating bullish bias.
The Scalper Signal showed a green arrow at 148.53. A buy trade was entered at 148.53.
Stop-loss set at 148.45 (8 pips risk).
Price moved to 148.63 within 10 minutes, achieving a 10 pip gain.
Trade closed when a red arrow appeared.
Strategy Tips
- Focus on major currency pairs with high liquidity and tight spreads.
- Trade only when the VWAP channel bias and the Scalper arrow signal align.
- Keep stop-loss tight and pip targets modest; small, consistent wins accumulate quickly.
- Check higher timeframes for trend confirmation to improve trade probability.
- Use alerts for arrow signals to avoid missing quick trades.
- Maintain a trading journal to record entries, exits, and trade outcomes.
Download Now
Download the “Anchored VWAP Channel.ex4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (Price calculation method), Width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, Daily, Weekly, Monthly
Type: VWAP
