About the Four Average Scalping Indicator
The Four Average Scalping Indicator for MetaTrader 4 is a technical analysis tool designed to support short-term forex trading strategies.
It focuses on identifying momentum shifts in price by calculating the difference between four predefined price averages.
These calculations are visualized through a histogram displayed in a separate indicator window, allowing traders to monitor changes in market direction as they develop.
In addition to the histogram, the indicator plots directional arrows directly on the price chart to highlight potential trade signals.
This combination helps traders align momentum changes with price action in a structured way.
The indicator can be applied to any currency pair and timeframe, though it is primarily used for intraday and scalping approaches where timing and clarity are important.
Free Download
Download the “fouraverage-indicator.ex4” MT4 indicator
Key Features
- Responsive zero-lag histogram oscillator that tracks real-time momentum shifts.
- Directional arrows printed on the main chart to highlight high-probability entry points.
- Color-coded bars that change from red to green to signal immediate trend transitions.
- Flexible settings that allow for optimization across different currency pairs and volatility levels.
Indicator Chart
The following chart displays the Four Average Scalping Indicator applied to a standard currency pair.
You can see how the red and green arrows align with the histogram crossovers.
These signals mark the transitions between bullish and bearish market phases, allowing for precise entry timing during active trading sessions.
Guide to Trade with Four Average Scalping Indicator
Buy Rules
- Wait for the histogram bars to move from negative territory into positive territory.
- Confirm that a green arrow has appeared on the price chart.
- Ensure the candle associated with the arrow has closed before entering the trade.
Sell Rules
- Monitor the histogram for a shift from positive territory into negative territory.
- Verify that a red arrow has been printed above the current price candle.
- Open a short position once the signal candle has finished its formation.
Stop Loss
- For buy trades, place your stop loss 1 pip below the most recent support level.
- For sell trades, place your stop loss 1 pip above the most recent resistance level.
- Adjust your risk to ensure the stop loss aligns with your account management plan.
Take Profit
- Exit the trade when the histogram color changes in the opposite direction.
- Alternatively, aim for a fixed risk-to-reward ratio of 1 to 2.
- Close the position manually if a reversal arrow appears before your target is hit.
Four Average Scalping Indicator + 4 Time Frame Hull Trend MT4 Strategy
This MT4 scalping strategy combines the clear entry signals of the Four Average Scalping Indicator with the trend confirmation provided by the 4 Time Frame Hull Trend Indicator.
The Four Average Scalping Indicator displays green arrows for buy trades and red arrows for sell trades.
The 4 Time Frame Hull Trend shows a buy bias when all four HMAs are green and a sell bias when all four HMAs are purple.
Combining these two indicators helps scalpers take trades that are aligned with both short-term momentum and higher timeframe trend direction.
This strategy works best on M1, M5, and M15 charts and is suitable for highly liquid pairs such as EURUSD, GBPUSD, USDJPY, and AUDUSD.
Buy Entry Rules
- All four HMAs of the Hull Trend indicator are green, indicating a bullish bias.
- Four Average Scalping Indicator displays a green arrow, confirming a buy signal.
- Enter long at the open of the candle following the green arrow.
- Place a stop loss below the most recent swing low or below the nearest HMA support.
- Close the trade when the Four Average Scalping arrow changes color to red.
Sell Entry Rules
- All four HMAs of the Hull Trend indicator are purple, indicating a bearish bias.
- Four Average Scalping Indicator displays a red arrow, confirming a sell signal.
- Enter short at the open of the candle following the red arrow.
- Place a stop loss above the most recent swing high or above the nearest HMA resistance.
- Close the trade when the Four Average Scalping arrow changes color to green.
Advantages
- Helps traders quickly identify short-term trade opportunities with visual arrow signals.
- Provides trend confirmation across multiple timeframes, reducing the risk of trading against the market.
- Scalable for different trading styles, from aggressive M1 scalping to slightly longer M15 trades.
- Reduces emotional decision-making by combining objective trend filters and precise entry signals.
- It can be used on multiple currency pairs, making it flexible for portfolio diversification.
Drawbacks
- In very volatile markets, arrows may appear too frequently, increasing the risk of false signals.
- Dependence on the alignment of four HMAs can limit trade frequency, causing fewer opportunities.
- Requires constant monitoring on lower timeframes to capture quick moves effectively.
- Less effective during sideways or range-bound markets where HMA colors and arrows may conflict.
Case Study 1: EURUSD M5
During the London session, all four HMAs on the Hull Trend indicator were green, confirming a bullish bias.
A green arrow appeared on the Four Average Scalping Indicator at 1.0915.
A long trade was entered at 1.0917 with a stop loss at 1.0905.
Price moved upward, and the trade was closed at 1.0932 when the arrow changed color, capturing 15 pips.
Case Study 2: GBPJPY M1
GBPJPY had all four HMAs purple on the Hull Trend, signaling a sell bias.
A red arrow appeared on the Four Average Scalping Indicator at 150.25.
A short trade was entered at 150.23 with a stop loss at 150.40.
Price declined, and the trade was closed at 150.05 when the arrow flipped green, resulting in an 18 pip profit.
Strategy Tips
- Only take trades when the Four Average Scalping arrow aligns with the Hull Trend bias.
- Monitor the arrow color changes closely to exit trades at the optimal moment.
- Use proper risk management and small lot sizes due to the fast-paced nature of scalping.
- Wait for clear alignment of all four HMAs before entering to reduce false entries.
Download Now
Download the “fouraverage-indicator.ex4” Metatrader 4 indicator
FAQ
Can I use the Four Average Scalping Indicator on the 1-minute timeframe?
While it is possible, the signals are much more reliable on the 15-minute chart and higher.
The 1-minute chart often contains excessive price noise that can trigger rapid histogram flips.
Using it on M15 or H1 ensures the momentum shifts have enough weight to sustain a profitable move.
Which currency pairs work best with this histogram tool?
This tool performs best on major currency pairs like EURUSD and GBPUSD.
These pairs offer the high liquidity and tight spreads necessary for a scalping strategy to be effective.
How do the four averages improve the signal quality?
By blending four different calculations, the indicator creates a more stable baseline than a single moving average.
This multi-layered approach filters out minor price spikes, ensuring that the histogram only changes color when a genuine shift in momentum occurs.
Summary
The Four Average Scalping Indicator is a robust solution for traders who need a quick, reliable way to read intraday momentum.
To improve your results, consider pairing this tool with a higher-timeframe trend filter.
Ensuring you only take buy signals during an uptrend can significantly increase your win rate.
