About the Anchored VWAP Channel Indicator
The Anchored VWAP Channel Indicator for Metatrader 4 is a volume-based trading tool designed to identify fair value areas and trend direction.
It is built around the volume-weighted average price and plots dynamic channel levels that adapt to changing market conditions.
By anchoring VWAP to a specific point, traders can better understand where institutional volume is concentrated.
The indicator displays three channel lines directly on the main chart.
These lines help define bullish and bearish zones while filtering out random price noise.
When price respects the channel and moves in line with its slope, traders gain a strong directional bias.
This makes the indicator suitable for trend continuation setups, pullback entries, and structured trade management across all timeframes.
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Download the “Anchored VWAP Channel.ex4” MT4 indicator
Key Features
- Based on volume-weighted average price calculations.
- Displays a three-line dynamic price channel.
- Helps identify trend direction and market bias.
- Works well for trend-following and pullback trades.
- Can be combined with other technical indicators.
Indicator Chart
The Anchored VWAP Channel Indicator is plotted on the main trading chart.
The orange, dotted gray, and blue channel lines surround price and adjust as volume flows into the market.
The chart shows how price interacts with the channel during trending phases, highlighting potential buy and sell areas.
Guide to Trade with Anchored VWAP Channel Indicator
Buy
- Open a buy trade when a candlestick closes above the orange VWAP channel line.
- Confirm that the channel is sloping upwards.
- Ensure price remains above the dotted middle VWAP line.
Sell
- Open a sell trade when a candlestick closes below the blue VWAP channel line.
- Confirm that the channel is sloping downwards.
- Ensure price remains below the dotted middle VWAP line.
Stop Loss
- Place the stop loss below the dotted middle VWAP line for buy trades.
- Place the stop loss above the dotted middle VWAP line for sell trades.
- Adjust stop distance based on market volatility.
Take Profit
- Set take profit near the opposite VWAP channel boundary.
- Scale out partial profits as price approaches channel extremes.
- Trail stop loss if price continues to follow the channel slope.
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.
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
FAQ
What does anchoring VWAP mean?
Anchoring VWAP means calculating the average price from a specific starting point, such as a swing high, swing low, or session open.
Is this indicator suitable for trending markets?
Yes, the Anchored VWAP Channel performs best when markets show sustained directional movement.
Can this indicator be used for intraday trading?
It works well on intraday timeframes and can also be applied to higher timeframes for swing trading.
Summary
The Anchored VWAP Channel Indicator for MT4 offers traders a volume-driven way to assess trend direction and value zones.
Its adaptive channel design helps filter noise and focus on high-probability price behavior.
With straightforward rules, strong visual guidance, and broad timeframe compatibility, it is a useful addition for traders who rely on volume-aware trend analysis and disciplined trade execution.
