Envelopes Histogram is a free mt4 (Metatrader 4) Forex indicator that draws a trend-following histogram based on Envelopes on the chart.
The indicator is easy to follow and provides multiple trade opportunities throughout the day for both scalpers and day traders.
The indicator appears in a separate MT4 chart window as a colored yellow/red envelopes channel.
Envelopes histogram can be used in multiple ways.
Trading Signals
- A buy signal occurs as soon as the first green colored histogram bar appears on the chart.
- A sell signal occurs as soon as the first yellow colored histogram bar appears on the chart.
The Envelopes Histogram indicator can be used for both trade entry and exit, or as an additional confirmation filter for other strategies and systems.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “envelopes-histogram.mq4” indicator for MT4
Indicator Example Chart (EUR/USD H1)
The example chart below displays the Envelopes Histogram mt4 indicator in action on the trading chart.
Tips:
Feel free to use your own favorite trade entry, stop loss and take profit strategy to trade with the Envelopes Histogram 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: Envelopes
Does the indicator repaint? No.
MT4 Scalping Strategy: Envelopes Histogram + Best Forex Scalping Indicator
This strategy combines the Envelopes Histogram and the Best Forex Scalping Indicator for MT4 to create a high-precision scalping system.
It is designed for traders aiming to capitalize on short-term price movements in the forex market.
The strategy is effective on lower timeframes such as M1, M5, and M15, making it suitable for day traders and scalpers seeking quick entries and exits.
Buy Entry Rules
- Buy Signal: Enter a buy trade when the Envelopes Histogram shows green bars, indicating strong bullish momentum. Ensure that the Best Forex Scalping Indicator confirms the buy signal.
- Stop Loss: Place the stop loss just below the most recent swing low to protect against unexpected market reversals.
- Take Profit: Set a take profit target at a risk-reward ratio of 1:2, or exit the trade when the Envelopes Histogram shifts to yellow bars, signaling a potential trend reversal.
Sell Entry Rules
- Sell Signal: Enter a sell trade when the Envelopes Histogram displays yellow bars, indicating strong bearish momentum. Confirm the signal with the Best Forex Scalping Indicator.
- Stop Loss: Position the stop loss just above the most recent swing high to mitigate potential losses.
- Take Profit: Set a take profit target at a risk-reward ratio of 1:2, or exit the trade when the Envelopes Histogram turns green, suggesting a possible trend reversal.
Advantages
- High Accuracy: The combination of the Envelopes Histogram and the Best Forex Scalping Indicator provides reliable signals, enhancing trade accuracy.
- Quick Execution: Suitable for fast-paced trading environments, allowing traders to capitalize on short-term price movements.
- Clear Entry and Exit Points: The strategy offers well-defined levels for entering and exiting trades, aiding in effective trade management.
Drawbacks
- Requires Active Monitoring: Due to the fast-paced nature of scalping, traders need to monitor the market closely to execute trades promptly.
- Not Suitable for All Market Conditions: The strategy performs best in trending markets and may produce false signals during sideways or choppy market conditions.
Example Case Studies
Case Study 1
On a 5-minute EUR/USD chart, the Envelopes Histogram displayed a series of green bars, indicating strong bullish momentum.
The Best Forex Scalping Indicator confirmed the buy signal (blue arrows).
The trader entered a buy position with a stop loss below the recent swing low and a take profit target at twice the risk.
The trade was successful, yielding a profit as the price moved in the anticipated direction.
Case Study 2
On a 15-minute GBP/USD chart, the Envelopes Histogram showed yellow bars, signaling bearish momentum.
The Best Forex Scalping Indicator is aligned with the sell signal (red arrows).
The trader entered a sell position with a stop loss above the recent swing high and a take profit target at twice the risk.
The trade was profitable as the market continued its downward trend.
Strategy Tips
- Use Multiple Timeframe Analysis: Confirm signals on higher timeframes (e.g., M15 or M30) to increase the reliability of trade setups.
- Implement Proper Risk Management: Always use stop losses and adhere to a consistent risk-reward ratio to protect capital.
Download Now
Download the “envelopes-histogram.mq4” indicator for Metatrader 4
