The Stochastic on Bollinger Bands indicator for Metatrader 4 is an overbought/oversold trend indicator, and it can be used for trade entry and exit.
The indicator appears as Bollinger Bands with the RSI signal line plotted onto it in the bottom chart of the trading platform.
The indicator is very reliable, lightweight, and will not slow down your trading platform.
This indicator type works very well for identifying short-term trade opportunities (scalping, day trading).
Buy & Sell Trade Example
- Open a buy trade when the yellow RSI signal line crosses back above the lower Bollinger band from below and the overall market trend is up.
- Open a sell trade when the yellow RSI signal line crosses back below the upper Bollinger band from above and the overall market trend is down.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “Stochastic bollinger bands.mq4” indicator for MT4
Indicator Chart (EUR/USD H4)
The picture below shows the Stochastic on Bollinger Bands mt4 indicator in action on the trading chart.
Tips:
Feel free to use your own favorite trade entry, stop loss and take profit method while trading with the Stochastic on Bollinger Bands Forex indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: Stochastic
Does the indicator repaint? No.
Stochastic on Bollinger Bands + Magic Trend Indicator Forex Scalping Strategy
This scalping strategy combines the Stochastic on Bollinger Bands Forex Indicator MT4 with the Magic Trend Forex Indicator MT4.
The Stochastic on Bollinger Bands signals potential reversals based on RSI behavior relative to Bollinger Bands.
The Magic Trend indicator confirms the market direction with a green line for bullish trends and a red line for bearish trends.
By combining trend confirmation with momentum-based reversal signals, traders can efficiently capture short-term moves.
Buy Entry Rules
- Confirm the Magic Trend line is green, indicating an uptrend.
- Wait for the yellow RSI line on the Stochastic on Bollinger Bands indicator to cross back above the lower Bollinger Band from below.
- Enter a buy trade at the close of the confirming candle.
- Place a stop loss below the recent swing low or below the lower Bollinger Band.
- Take profit targets: 5–12 pips on M1, 10–20 pips on M5, 15–25 pips on M15 charts.
Sell Entry Rules
- Confirm the Magic Trend line is red, indicating a downtrend.
- Wait for the yellow RSI line on the Stochastic on Bollinger Bands indicator to cross back below the upper Bollinger Band from above.
- Enter a sell trade at the close of the confirming candle.
- Place a stop loss above the recent swing high or above the upper Bollinger Band.
- Take profit targets: 5–12 pips on M1, 10–20 pips on M5, 15–25 pips on M15 charts.
Advantages
- Combines trend direction and momentum-based reversal signals for higher-probability scalping trades.
- Works across multiple intraday time frames.
- Helps avoid counter-trend trades by confirming trend with Magic Trend.
- Applicable to multiple highly liquid currency pairs.
Drawbacks
- Scalping can be affected by sudden volatility spikes, especially on exotic pairs.
- Signals may fail during extended ranging or sideways markets.
- Indicator signals can sometimes lag, causing entries after part of the move has occurred.
Case Study 1: GBPJPY M5 – London Session
During the London session, GBPJPY displayed the Magic Trend line in green, confirming an uptrend.
The Stochastic RSI crossed above the lower Bollinger Band at 162.45.
A buy trade was entered with a stop loss at 162.30.
Price moved to 162.60 within 18 minutes, yielding 15 pips.
Trend and reversal alignment contributed to a reliable scalping trade.
Case Study 2: USDCHF M1 – New York Session
USDCHF on the M1 chart showed the Magic Trend line in red, signaling a downtrend.
The Stochastic RSI crossed below the upper Bollinger Band at 0.9125.
A sell trade was entered with a stop loss at 0.9132.
Price fell to 0.9115 in 12 minutes, producing a 10-pip profit.
Strategy Tips
- Only enter trades when both the Magic Trend and Stochastic on Bollinger Bands signals align.
- Focus on high-liquidity pairs during active trading sessions for more reliable scalping.
- Keep risk per trade small (1–2% of account) due to the fast-paced nature of scalping.
- Be cautious with highly volatile pairs like GBPJPY, as sudden moves may trigger stop losses prematurely.
By using the Stochastic on Bollinger Bands MT4 along with the Magic Trend MT4, traders can capture intraday reversals aligned with the trend for high-probability scalping trades.
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Download the “Stochastic bollinger bands.mq4” indicator for Metatrader 4
