The Variation Oscillator Forex indicator for MT4 is a short-term technical oscillator that identifies bullish/bearish market sentiments.
The indicator opens up in the bottom window of the trading platform as a red line that fluctuates above and below the zero level.
Utilize the Variation Oscillator for scalping the most volatile trading sessions (aim for 5-15 pips profit per trade).
Key takeaways:
- The market sentiment is considered bullish when the Variation Oscillator crosses back above the zero level.
- The market sentiment is considered bearish when the Variation Oscillator crosses back below the zero level.
Feel free to play with the indicator’s default settings and different parameters.
The indicator works equally well on all currency pairs (majors, minors and exotic) and shows promising results if used correctly.
Free Download
Download the “variation oscillator.mq4” indicator for MT4
Indicator Chart (EUR/USD H1)
The example chart below shows the Variation Oscillator Forex indicator in action on the MT4 trading platform.
Trading Tips:
Feel free to use your own favorite trade entry, stop loss and take profit strategy when trading with this technical oscillator.
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)
Trading Instruments: Any
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: Oscillator
Does the indicator repaint? No.
Variation Oscillator + Guppy MA Signal MT4 Forex Scalping Strategy
This scalping strategy combines the Variation Oscillator Indicator for MT4 with the Guppy Multiple Moving Average Signal Indicator for MT4.
It is designed for very short-term trades on M1 and M5 charts, helping traders capture quick price moves with minimal risk.
The Variation Oscillator identifies momentum shifts when crossing above or below zero, while the Guppy MA confirms the trend using blue (bullish) and orange (bearish) lines.
How This Strategy Works
The Variation Oscillator generates early momentum signals, and the Guppy MA filters trades to ensure they align with the overall trend.
Trades are only taken when both indicators are in agreement, reducing false signals and improving the probability of successful scalping setups.
Buy Entry Rules
- Wait for the Variation Oscillator to cross back above zero, indicating bullish momentum.
- Confirm that the Guppy MA line is blue, indicating an uptrend.
- Enter a buy trade at the close of the confirmation candle.
- Set a stop loss below the recent swing low (5–10 pips for M1, 10–20 pips for M5).
- Take profit at 10–20 pips on M1 or 20–30 pips on M5, or exit if the Guppy MA trend turns orange.
Sell Entry Rules
- Wait for the Variation Oscillator to cross back below zero, indicating bearish momentum.
- Confirm that the Guppy MA line is orange, indicating a downtrend.
- Enter a sell trade at the close of the confirmation candle.
- Set a stop loss above the recent swing high (5–10 pips for M1, 10–20 pips for M5).
- Take profit at 10–20 pips on M1 or 20–30 pips on M5, or exit if the Guppy MA trend turns blue.
Advantages
- Clear visual signals allow fast decision-making for scalping.
- Combines momentum and trend confirmation for higher-probability trades.
- Works well on liquid pairs like EUR/USD, GBP/USD, USD/JPY, and EUR/JPY.
- Short-term trades reduce exposure to overnight risk.
Drawbacks
- Requires constant monitoring due to M1 and M5 timeframes.
- Spreads and slippage can affect profits in very short trades.
- Major news events may invalidate signals quickly.
Case Study 1 – USD/JPY M1 Chart
During the London session, USD/JPY showed the Variation Oscillator crossing above zero at 149.45 while the Guppy MA line turned blue, confirming a bullish trend.
A buy trade was entered at 149.47, stop-loss at 149.38, and target at 149.62.
The trade reached the target within 10 minutes for +15 pips.
Case Study 2 – EUR/GBP M5 Chart
On EUR/GBP, the Variation Oscillator crossed below zero at 0.8540 while the Guppy MA line turned orange, confirming a bearish trend.
A sell trade was entered at 0.8538, stop-loss at 0.8550, and take profit at 0.8520.
The price reached the target in 20 minutes for +18 pips.
Strategy Tips
- Focus on major or highly liquid pairs to reduce slippage and spread costs.
- Use a small fixed lot size due to the fast nature of scalping.
- Exit early if the Guppy MA trend or oscillator shows signs of reversal.
- Keep a trading journal to track results, refine settings, and improve pair selection.
This strategy combines momentum detection with trend confirmation, providing disciplined, actionable scalping setups on MT4.
It allows Forex traders to capture multiple small profits during active market sessions.
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Download the “variation oscillator.mq4” indicator for Metatrader 4
