The Volatility Forex Indicator 2 for Metatrader 4 measures market volatility and displays it on the trading chart as blue histogram bars.
The indicator can help you pinpoint both trade entries and exits.
Key Points:
- Large blue histogram bars indicate increased market volatility.
- Small blue histogram bars indicate a sideways trading market.
It’s advised to combine this indicator with trend indicators (moving averages, Bollinger Bands,..) for better trade entry prediction.
Free Download
Download the “Volatility indicator 2.mq4” indicator for MT4
Indicator Chart (EUR/USD H4)
The example chart below shows the Volatility Forex Indicator 2 in action.
Tips:
Feel free to use your own favorite trade entry, stop loss and take profit strategy when trading with the custom built Volatility Forex Indicator 2.
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: Volatility
Does it repaint? No.
Volatility Forex 2 + FQ Signals Bars MT4 Scalping Strategy
This strategy combines the Volatility Forex Indicator 2 for MT4 with the FQ Signals Bars Forex Indicator for MT4.
It is designed for short-term trading on M1, M5, and M15 charts, helping traders identify periods of high volatility and precise entry points.
The Volatility Forex indicator identifies market conditions via histogram bars, while FQ Signals Bars provides buy and sell signals with arrows.
How This Strategy Works
The Volatility Forex indicator measures market activity: large blue bars indicate increased volatility, while small blue bars suggest a sideways or quiet market.
The FQ Signals Bars indicator provides directional entry signals: blue arrows indicate buy opportunities, and red arrows indicate sell opportunities.
Trades are executed only when the market shows sufficient volatility and both indicators align, enhancing accuracy and reducing false signals.
Buy Entry Rules
- Confirm that the Volatility Forex histogram shows large blue bars, indicating strong market movement.
- Wait for a blue arrow from the FQ Signals Bars indicator.
- Enter a buy trade at the close of the candle producing the blue arrow.
- Set a stop-loss a few pips below the recent swing low (adjust based on timeframe: 3–6 pips for M1, 8–12 for M5, 15–25 for M15).
- Set a take-profit target of 8–15 pips for M1, 15–25 for M5, and 25–40 for M15, or exit when a red arrow appears.
Sell Entry Rules
- Confirm that the Volatility Forex histogram shows large blue bars, indicating strong market movement.
- Wait for a red arrow from the FQ Signals Bars indicator.
- Enter a sell trade at the close of the candle producing the red arrow.
- Set a stop-loss a few pips above the recent swing high (adjust per timeframe).
- Set a take-profit target of 8–15 pips for M1, 15–25 for M5, and 25–40 for M15, or exit when a blue arrow appears.
Advantages
- Combines volatility measurement with clear entry signals for higher probability trades.
- Works on multiple short-term timeframes, allowing flexible scalping opportunities.
- Helps avoid trades in low-volatility conditions where moves are minimal.
Drawbacks
- Small profit targets on M1 and M5 charts require multiple trades to achieve meaningful gains.
- High-speed scalping requires constant attention and fast execution.
Case Study 1 – EUR/JPY M1 Chart
During the London session, large blue volatility bars appeared, and a blue FQ Signals Bars arrow was triggered.
A buy trade was entered at 143.52 with a stop-loss at 143.46.
Price moved quickly to the take-profit level of 9 pips, and the trade was closed within 6 minutes.
Case Study 2 – GBP/USD M5 Chart
On GBP/USD, the volatility indicator showed strong, large blue bars while a red FQ Signals Bars arrow appeared.
A sell trade was entered at 1.2715 with a stop-loss at 1.2725.
The price fell to the take-profit target of 20 pips over 18 minutes before reversing.
Case Study 3 – USD/CHF M15 Chart
During a New York session, the Volatility Forex histogram displayed sustained large blue bars, and a blue FQ Signals Bars arrow appeared.
A buy trade was entered at 0.9123 with a stop-loss at 0.9110.
The price reached 0.9145, yielding 22 pips before a red arrow indicated a potential reversal.
Strategy Tips
- Always check volatility histogram size before entering; avoid trades in sideways markets.
- Adjust stop-loss and take-profit targets according to the timeframe and pair volatility.
- Ensure both the volatility condition and the arrow signal are aligned before taking a trade.
- Consider exiting early if the histogram bars decrease sharply even before a counter arrow appears.
By combining volatility measurement from the Volatility Forex Indicator 2 with precise directional signals from FQ Signals Bars, currency traders can capture high-probability scalping opportunities on M1, M5, and M15 charts.
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Download the “Volatility indicator 2.mq4” indicator for Metatrader 4
