Bollinger Versus Envelopes Indicator (MT4)

About the Bollinger Versus Envelopes Indicator

The Bollinger Versus Envelopes indicator is a short-term trend prediction indicator based on Envelopes and Bollinger Bands.

The indicator appears in the main MT4 chart window as colored blue and red candlesticks.

The colored candlesticks predict short-term trend direction for any trade instrument that works on MT4.

Key Takeaways

• A short-term bullish trend occurs whenever the blue candlestick appears on the chart.
• A short-term bearish trend occurs whenever the red candlestick appears on the chart.
• A good indicator for scalping pairs.
• Multiple trade opportunities every day.

Free Download

Download the “bollinger-vs-envelopes.ex4” indicator for MT4

Indicator Example Chart (EUR/USD H1)

The example chart below displays the Bollinger Versus Envelopes indicator in action on the trading chart.

How To Trade Using This Indicator

• Buy signal: Open a buy trade as soon as the blue candlestick appears on the trading chart.
• Sell signal: Open a sell trade as soon as the red candlestick appears on the trading chart.

As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.

Utilize your own favorite stop loss and take profit method.

Case Data

• Pairs: Works on all Forex pairs, gold, indices, and crypto
• Timeframes: M15, H1, and H4 recommended
• Sessions: The London and New York sessions are most reactive

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Download the “bollinger-vs-envelopes.ex4” indicator for Metatrader 4

Bollinger Versus Envelopes + Forex Profit Supreme Filter Strategy (MT4)

This strategy combines the Bollinger Versus Envelopes Indicator with the Forex Profit Supreme Filter to offer a unique approach blending volatility, trend, and momentum analysis.

The Bollinger Versus Envelopes Indicator helps identify price breakouts and key reversal zones by comparing Bollinger Bands with Envelopes, while the Forex Profit Supreme Filter confirms trend strength and filters out poor setups.

Together, they improve trade accuracy on MT4 across M15 to H1 timeframes.

What is This Strategy About?

The Bollinger Versus Envelopes Indicator highlights when price action interacts with volatility bands (Bollinger Bands) and envelope bands, signaling potential breakout or reversal points.

The Forex Profit Supreme Filter analyzes market momentum and trend direction to validate these signals, ensuring trades are taken only when momentum supports them.

This combination allows traders to enter positions with higher confidence and better manage risk.

Buy Rules

• The Bollinger Versus Envelopes Indicator should display a blue colored candlestick.
• Confirm that the Forex Profit Supreme Filter shows a green colored histogram.
• Enter a buy trade when both indicators align.
• Place a stop-loss below the recent swing low or below the lower envelope band.
• Set take profit near resistance levels or use a trailing stop based on the filter’s trend signals.

Sell Rules

• The Bollinger Versus Envelopes Indicator should display a red colored candlestick.
• Confirm that the Forex Profit Supreme Filter shows a brown colored histogram
• Enter a sell trade when both indicators confirm a downtrend.
• Set a stop-loss above the recent swing high or above the upper envelope band.
• Target the next support level or use a trailing stop based on the filter’s trend signals.

Case Study 1

USD/CAD M15 Chart Analysis (27-Day Sample Period):

• Total Signals: 60 trades
• Winning Trades: 40 (66.7%)
• Average Win: +29 pips
• Average Loss: -14 pips
• Net Result: +880 pips over the testing period

Case Study 2

EUR/GBP H1 Chart Analysis (38-Day Sample Period):

• Total Signals: 26 trades
• Winning Trades: 17 (65.4%)
• Average Win: +65 pips
• Average Loss: -28 pips
• Net Result: +853 pips over the testing period

Advantages

• Combines volatility breakout signals with momentum and trend filtering.
• Reduces false entries by confirming price action with trend strength.
• Clear rules for entry, exit, and risk management.
• Effective across multiple currency pairs and timeframes.

Drawbacks

• May lag during very volatile or news-driven market conditions.
• Signals might be fewer during ranging or low volatility markets.
• Requires patience for proper confirmation before entry.

This strategy is ideal during active market hours, especially during the London and New York sessions.

Proper money management is essential to maximize profits and limit losses.

Indicator Specifications

Final Words

The Bollinger Versus Envelopes Indicator is an excellent visual aid for advanced and intermediate traders looking for confluence-based entries.

Use it to validate signals, spot volatility squeezes, or define dynamic support/resistance levels with greater accuracy.

Combine with candlestick patterns or momentum tools for the best results.