RSI Bands is a free mt4 (Metatrader 4) indicator that provides buy/sell signals and works on the RSI trading algorithm.
The indicator pops up in the main chart as two colored lines that cross each other whenever the trend reverses.
Buy & Sell Trade Example
- Open a buy trade when the yellow signal line crosses the blue dotted signal line upwards.
- Open a sell trade when the yellow signal line crosses the blue dotted signal line downwards.
The RSI Bands Forex indicator can be used for both trade entry and exit, or as an additional RSI-based signal indicator.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “Rsi bands.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The picture below shows the RSI 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 RSI 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: RSI
Does the indicator repaint? No.
RSI Bands Indicator + Waddah Attar MT4 Scalping Strategy
This scalping strategy combines the RSI Bands Forex Indicator MT4 with the Waddah Attar Forex Scalping Indicator MT4.
It is designed for traders who prefer quick intraday trades, typically on 1-minute to 15-minute charts.
By aligning momentum crosses from RSI Bands with explosive trend signals from Waddah Attar’s histogram, the strategy identifies high-probability short-term entries.
How It Works
The RSI Bands indicator uses two lines: a yellow “signal” line and a blue dotted line.
A crossing of the yellow line upward over the blue dotted line indicates a buy trend, while a downward crossing indicates a sell trend.
The Waddah Attar indicator shows a coloured histogram: green bars indicate bullish momentum, red bars indicate bearish momentum.
The strategy only enters trades when both the RSI Bands crossover and the histogram align in the same direction.
This combination reduces false signals and increases scalping accuracy.
Trades are typically held for a short time, capturing small pip gains, which can accumulate over multiple trades in a session.
Because the method relies on short-term momentum and trend alignment, it is most effective during active market sessions with sufficient volatility, such as the London or New York sessions.
Buy Entry Rules
- The yellow RSI Bands line crosses upward over the blue dotted line.
- Waddah Attar’s histogram shows a green bar immediately after the crossover.
- Enter a buy trade at the opening of the next candle after confirmation.
- Stop loss is placed a few pips below the recent swing low or the candle that triggered the signal.
- Take profit is either a fixed 5–15 pips, or exit when the histogram turns red or the RSI yellow line crosses back down — whichever occurs first.
Sell Entry Rules
- The yellow RSI Bands line crosses downward under the blue dotted line.
- Waddah Attar’s histogram shows a red bar immediately after the crossover.
- Enter a sell trade at the next candle after confirmation.
- Stop loss is placed a few pips above the recent swing high or the candle that triggered the crossover.
- Take profit is either a fixed 5–15 pips, or exit when the histogram turns green or the RSI yellow line crosses back up — whichever occurs first.
Advantages
- Combining crossover and histogram reduces false signals in active markets.
- Short holding times allow multiple trades per session for scalable profits.
- Fixed small pip targets reduce risk exposure, while the optional histogram/RSI exit captures extended moves.
- Works on multiple currency pairs with high liquidity and tight spreads.
Drawbacks
- False entries can occur in choppy or low-volatility markets where histogram bars flicker.
- Scalping requires continuous monitoring; missing a candle can mean a missed trade or delayed exit.
- Fixed pip targets may leave potential profits on the table in strong trends if trades are closed too early.
Example Case Studies
Case Study 1 – EUR/USD 5-Minute Chart
The yellow RSI line crossed upward over the blue dotted line at 1.1200, while Waddah Attar displayed a green histogram bar, confirming bullish momentum.
A buy trade was opened at 1.1202. Stop loss placed 6 pips below at 1.1196. Take profit was set for 10 pips.
The histogram remained green, and the trade reached the target in 12 minutes.
This shows how quickly intraday gains can be captured when momentum and crossover align.
Case Study 2 – GBP/JPY 15-Minute Chart
The RSI yellow line crossed downward under the blue dotted line at 150.20, and Waddah Attar’s histogram displayed a red bar.
A sell trade was entered at 150.18, stop loss at 150.26, take profit at 15 pips (150.03).
The trade hit the target within 20 minutes as momentum stayed strong, demonstrating effective trend confirmation using both indicators.
Case Study 3 – AUD/JPY 1-Minute Chart
During a short spike, RSI crossed upward at 91.50, and Waddah Attar showed a green bar.
A buy trade was entered at 91.52. Stop loss was set 5 pips below at 91.47.
The histogram later turned red after 12 minutes.
Following the alternate take profit rule (exit on histogram reversal), the trade was closed at 91.63, capturing 11 pips.
This case demonstrates using dynamic exits for better risk-reward control.
Case Study 4 – USD/CAD 5-Minute Chart
The RSI yellow line crossed downward at 1.3600, and Waddah Attar showed red.
Sell trade opened at 1.3598, stop loss at 1.3605, take profit fixed at 8 pips.
The histogram stayed red for several candles, allowing the trade to reach the target in under 10 minutes, illustrating rapid scalping opportunities in volatile pairs.
Strategy Tips
- Focus on high liquidity pairs to minimize spread costs for small pip targets.
- Trade primarily during the London and New York sessions for stronger, more reliable momentum signals.
- Monitor major economic news — avoid scalping trades right before high-impact announcements.
- Combine fixed pip targets with histogram/RSI exit for flexible trade management depending on market conditions.
- Keep a detailed trade journal to track which timeframes and currency pairs yield the best results for scalping.
- Adjust stop loss and take profit levels based on volatility and historical price movement of the pair being traded.
