The Band Moving Average forex technical indicator for MT4 draws a set of tradable bands that are based on a moving average.
The Metatrader 4 indicator consists of a middle band and two outer bands.
The upper blue outer band is considered resistance while the lower green band is support.
Trading bands are a great way to put you in a favorable trading position.
- Look for buy trade opportunities when the slope of the bands are pointing to the upside
- Look for sell trade opportunities when the slope of the bands are pointing to the downside
Best zone to execute a buy trade: between the red and green band.
Best zone to execute a sell trade: between the blue and red band.
This works for any trading style.
Free Download
Download the “band-moving-average.mq4” MT4 indicator
Indicator Chart (GBP/USD D1)
The GBP/USD Daily chart below displays the Band Moving Average Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Band Moving Average MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Open buy trade when price touches the red or green band and the bands are sloping up. Confirm the buy trade with other technical indicators or with price action techniques.
Sell Signal: Open sell trade when price touches the red or blue band and the bands are sloping down. Confirm the sell trade with other technical indicators or with price action techniques.
Trade Exit: Use your own method of trade exit.
Band Moving Average + RSI Triple Stochastic Divergence Forex MT4 Strategy
This strategy uses the Band Moving Average MT4 indicator to determine overall market bias via band slope and the RSI Triple Stochastic Divergence MT4 indicator to time entries via its colored histogram: blue for buys, red for sells.
When the bands slope upward the environment is bullish, and when they slope downward the bias becomes bearish.
The divergence indicator offers a momentum signal confirming entries.
This setup is designed for M15 or H1 charts, suitable for swing or medium-term trades.
It works especially well on major and cross currency pairs that show decent volatility and clear swings.
Buy Entry Rules
- The Band Moving Average bands are sloping upward.
- The RSI Triple Stochastic Divergence indicator prints a blue histogram bar indicating a buy signal.
- Wait for price to retrace toward the moving average band or a recent swing low, then look for a bullish candle confirming support.
- Enter long after the confirmation candle closes and the histogram stays blue.
- Place a stop loss a few pips below the recent swing low or just under the lower band depending on pair volatility.
- Set take profit near a recent swing high or use a fixed reward-to-risk ratio such as 1.5 to 1 or 2 to 1.
- Alternatively, trail stop as long as the histogram remains blue and bands stay upward.
Sell Entry Rules
- The Band Moving Average bands are sloping downward.
- The RSI Triple Stochastic Divergence indicator prints a red histogram bar indicating a sell signal.
- Wait for a retracement toward the moving average band or a recent swing high, then observe for a bearish candle confirming resistance.
- Enter short after the confirmation candle closes and the histogram remains red.
- Place a stop loss a few pips above the recent swing high or just above the upper band depending on volatility.
- Take profit near a recent swing low or apply a fixed reward-to-risk ratio.
- Alternatively, trail stop while the histogram stays red and bands continue downward.
Advantages
- Combines trend direction using band slope with momentum confirmation to reduce false entries from counter-trend moves.
- Flexible and works on multiple timeframes such as M15 and H1 and across various pairs.
- Dynamic stop and target zones using moving average bands that adapt to volatility.
- Clear entry conditions make it easy to execute without over-analyzing.
Drawbacks
- In choppy or sideways markets, the band slope may flatten, leading to unclear bias.
- Retracements may not materialize, causing missed or weaker entry setups.
- Indicator signals may lag at times, and momentum can reverse before reaching the target.
- Requires patience to wait for retracement and confirmation, which may result in fewer trades.
Example Case Study 1 (EURUSD H1 bullish swing)
On EURUSD H1, during a rally the Band Moving Average bands began sloping upward.
After a strong upward move, the price retraced toward the moving average band and formed support near 1.1050.
The divergence indicator turned blue. On the next bullish candle close a buy trade was entered at 1.1053.
Stop loss was placed at 1.1025 which is 28 pips below.
Price continued upward and reached 1.1105, netting 52 pips before partial profit taking.
The band slope remained upward and the histogram stayed blue, so the trailing stop was adjusted and the final result was 60 pips.
Example Case Study 2 (USDJPY M15 bearish move)
On USDJPY M15, the bands started sloping downward after a topping move.
Price retraced upward toward the upper band at 155.80 and the divergence indicator printed a red histogram.
A bearish confirmation candle closed at 155.78, triggering a short entry.
Stop loss was set at 156.05 which is 27 pips above.
The price dropped to 155.25, a move of 53 pips before bouncing. Histogram remained red and bands stayed downward.
Trade was closed at 155.25, capturing 53 pips profit.
Strategy Tips
- Trade pairs with enough volatility such as EURUSD, USDJPY, GBPUSD and AUDUSD for clear swings.
- Wait for retracements toward the band or moving average before entering to improve reward to risk.
- Check a higher time-frame band slope such as H4 for overall bias to avoid trades against the major trend.
- Exit early if the histogram weakens before reaching the target to preserve capital.
- Scale out part of the position when the histogram remains strong over several bars to secure profit.
- Use proper position sizing based on stop-loss distance and account risk tolerance.
- Do not enter if bands flatten or histogram flips quickly after entry.
Download Now
Download the “band-moving-average.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (Ma period, MA method, Percentage) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: trend
