Envelopes Toucher is a free Metatrader 4 Forex indicator that displays trend reversal signals whenever the price closes above or below the envelopes bands.
The indicator is easy to follow and provides multiple trade opportunities throughout the day for both scalpers and day traders.
The indicator appears in the main MT4 chart window as a colored yellow/blue envelopes channel along with the trend reversal signals.
Envelopes Toucher can be used in multiple ways.
Trading Signals
- The small white dots that occur underneath the lower band are buy signals.
- The small magenta dots that occur above the upper band are sell signals.
The Envelopes Toucher 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-toucher-indicator.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The example chart below displays the Envelopes Toucher 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 Toucher 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 Toucher & Awesome Oscillator
This scalping strategy combines the Envelopes Toucher and Awesome Oscillator indicators for MT4 to identify precise entry points in the forex market.
Designed for short-term traders, it aims to capitalize on quick price movements by providing clear buy and sell signals.
The strategy is particularly effective on lower timeframes such as M1, M5, and M15, making it suitable for active day traders and scalpers.
Buy Entry Rules
- Look for the candlestick to cross back above the Envelopes Toucher blue line from below.
- Confirm that the Awesome Oscillator shows positive histogram bars, reflecting upward momentum.
- Enter a buy trade once both indicators align and the price closes above the recent local resistance.
- Place the stop loss a few pips below the nearest swing low to manage risk effectively.
- Set a take profit level at twice the risk distance, or exit when the Awesome Oscillator starts to show declining bullish momentum.
Sell Entry Rules
- Wait for the candlestick to cross back below the Envelopes Toucher orange line from above.
- Ensure the Awesome Oscillator shows negative histogram bars to confirm downward momentum.
- Enter a sell trade when both indicators confirm and the price closes below the recent local support.
- Place the stop loss a few pips above the nearest swing high to protect against sudden reversals.
- Set a take profit target at twice the risk distance, or close the trade if the Awesome Oscillator starts to lose bearish strength.
Advantages
- Works well in trending markets by filtering out minor market noise.
- Allows for multiple trades per day due to clear entry and exit points.
- Helps identify momentum changes quickly for timely scalping decisions.
- Can be combined with other indicators or price action strategies for added confirmation.
Drawbacks
- May produce false signals during periods of low volatility or ranging markets.
- New traders may find it challenging to interpret signals without proper practice.
Example Case Studies
Case Study 1
On a 5-minute EUR/USD chart, the price moved back above the Envelopes Toucher blue line from below.
The Awesome Oscillator confirmed the buy signal with positive histogram bars.
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 price moved back below the Envelopes Toucher orange line from above.
The Awesome Oscillator aligned with the sell signal, displaying negative histogram bars.
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.
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Download the “envelopes-toucher-indicator.mq4” indicator for Metatrader 4
