About the Volatility Forex Indicator 2
The Volatility Forex Indicator 2 Indicator is a specialized technical tool that measures the intensity of price movement and presents it as a blue histogram in a separate window.
Unlike standard oscillators that track direction, this indicator focuses exclusively on the velocity of price action.
By calculating the rate of change over a specific period, it helps traders distinguish between a quiet, range-bound market and a high-momentum breakout.
This specific focus on market energy is essential for traders who need to know when a trend is gaining sufficient strength to sustain a move.
The indicator provides immediate feedback on market conditions through the size of its histogram bars.
When the blue bars expand, it signifies that market participation is increasing and volatility is high.
Conversely, small bars indicate a low-volatility environment where the market is likely consolidating.
This functionality is particularly useful for avoiding the frustration of entering trades in a flat market.
Free Download
Download the “Volatility indicator 2.mq4” indicator for MT4
Key Features
- Provides a real-time measurement of market volatility through a clean histogram interface.
- Helps traders identify the start of high-momentum moves before they fully develop on the price chart.
- Assists in filtering out sideways market conditions to reduce the frequency of false breakout signals.
- Allows for easy integration with trend-following tools to create a complete trading system.
Indicator Chart
The chart illustrates how the Volatility Forex Indicator 2 Indicator tracks market energy.
Large blue bars appear during strong price surges, while smaller bars correlate with periods of low-activity consolidation.
You can use these fluctuations to determine if the current market environment supports your specific trading strategy.
Guide to Trade with Volatility Forex Indicator 2
Buy Rules
- Identify a bullish trend using a primary trend indicator like a moving average.
- Wait for the Volatility Forex Indicator 2 Indicator bars to start increasing in size.
- Open a long position once the histogram shows a significant surge in market energy.
Sell Rules
- Identify a bearish trend using a primary trend indicator like a moving average.
- Wait for the Volatility Forex Indicator 2 Indicator histogram bars to begin expanding.
- Open a short position when the increase in volatility confirms the strength of the move.
Stop Loss
- Place your stop loss below the recent consolidation low for buy entries.
- Place your stop loss above the recent consolidation high for sell entries.
Take Profit
- Exit the trade when the Volatility Forex Indicator 2 Indicator histogram bars begin to noticeably shrink.
- Close the position if volatility drops significantly, as this often precedes a reversal or flat market.
Volatility Forex 2 + FQ Signals Bars MT4 Scalping Strategy
This strategy combines the Volatility Forex Indicator 2 for MT4 with the FQ Signals Bars Forex Indicator for MT4.
It is designed for short-term trading on M1, M5, and M15 charts, helping traders identify periods of high volatility and precise entry points.
The Volatility Forex indicator identifies market conditions via histogram bars, while FQ Signals Bars provides buy and sell signals with arrows.
How This Strategy Works
The Volatility Forex indicator measures market activity: large blue bars indicate increased volatility, while small blue bars suggest a sideways or quiet market.
The FQ Signals Bars indicator provides directional entry signals: blue arrows indicate buy opportunities, and red arrows indicate sell opportunities.
Trades are executed only when the market shows sufficient volatility and both indicators align, enhancing accuracy and reducing false signals.
Buy Entry Rules
- Confirm that the Volatility Forex histogram shows large blue bars, indicating strong market movement.
- Wait for a blue arrow from the FQ Signals Bars indicator.
- Enter a buy trade at the close of the candle producing the blue arrow.
- Set a stop-loss a few pips below the recent swing low (adjust based on timeframe: 3–6 pips for M1, 8–12 for M5, 15–25 for M15).
- Set a take-profit target of 8–15 pips for M1, 15–25 for M5, and 25–40 for M15, or exit when a red arrow appears.
Sell Entry Rules
- Confirm that the Volatility Forex histogram shows large blue bars, indicating strong market movement.
- Wait for a red arrow from the FQ Signals Bars indicator.
- Enter a sell trade at the close of the candle producing the red arrow.
- Set a stop-loss a few pips above the recent swing high (adjust per timeframe).
- Set a take-profit target of 8–15 pips for M1, 15–25 for M5, and 25–40 for M15, or exit when a blue arrow appears.
Advantages
- Combines volatility measurement with clear entry signals for higher probability trades.
- Works on multiple short-term timeframes, allowing flexible scalping opportunities.
- Helps avoid trades in low-volatility conditions where moves are minimal.
Drawbacks
- Small profit targets on M1 and M5 charts require multiple trades to achieve meaningful gains.
- High-speed scalping requires constant attention and fast execution.
Case Study 1 – EUR/JPY M1 Chart
During the London session, large blue volatility bars appeared, and a blue FQ Signals Bars arrow was triggered.
A buy trade was entered at 143.52 with a stop-loss at 143.46.
Price moved quickly to the take-profit level of 9 pips, and the trade was closed within 6 minutes.
Case Study 2 – GBP/USD M5 Chart
On GBP/USD, the volatility indicator showed strong, large blue bars while a red FQ Signals Bars arrow appeared.
A sell trade was entered at 1.2715 with a stop-loss at 1.2725.
The price fell to the take-profit target of 20 pips over 18 minutes before reversing.
Case Study 3 – USD/CHF M15 Chart
During a New York session, the Volatility Forex histogram displayed sustained large blue bars, and a blue FQ Signals Bars arrow appeared.
A buy trade was entered at 0.9123 with a stop-loss at 0.9110.
The price reached 0.9145, yielding 22 pips before a red arrow indicated a potential reversal.
Strategy Tips
- Always check volatility histogram size before entering; avoid trades in sideways markets.
- Adjust stop-loss and take-profit targets according to the timeframe and pair volatility.
- Ensure both the volatility condition and the arrow signal are aligned before taking a trade.
- Consider exiting early if the histogram bars decrease sharply even before a counter arrow appears.
Download Now
Download the “Volatility indicator 2.mq4” indicator for Metatrader 4
FAQ
How does the Volatility Forex Indicator 2 help with exit timing?
This tool is excellent for identifying trend exhaustion.
When you see the blue histogram bars consistently decreasing in height while the price is still moving, it suggests the momentum is fading.
Closing your position when volatility dries up helps you lock in profits before the market enters a choppy range.
Why should I combine this with a trend indicator like Bollinger Bands?
The Volatility Forex Indicator 2 Indicator does not show market direction, only the strength of the move.
By adding Bollinger Bands or a moving average, you gain the directional context needed to trade.
The volatility bars then act as the final trigger to ensure you are entering a move that has real power behind it.
What do very small blue histogram bars indicate for my strategy?
Small bars represent a market that lacks conviction. For most traders, this is a signal to stay on the sidelines.
Trading in low-volatility environments often leads to being stopped out by random price wiggles. Wait for the bars to grow before considering a new entry.
Summary
The Volatility Forex Indicator 2 is a vital asset for traders who prioritize market momentum.
Its ability to quantify price velocity and display it simply through blue histogram bars makes it a highly usable tool for both beginners and experienced professionals.
By focusing on volatility, you can significantly improve your trade selection and avoid the traps of a stagnant market.
While it is not a standalone directional system, its role as a filter is invaluable.
Integrating this tool into your workflow allows you to trade with more confidence during peak market hours.
