The Weighted Deviation Bands Forex Indicator for Metatrader 5 works similar to Bollinger Bands but it uses the linear weighted average for its calculations.
The indicator draws the Weighted Deviation bands on the chart and they can provide both accurate trade entry and exit signals.
During low volatile markets, the Weighted Deviation bands channel will be narrow while it will widen during high volatile markets.
Generally speaking, the trend is bullish when the bands are sloping up while bearish when the bands are sloping down.
- During up trending markets, traders look to enter the market near the lower band (buy on dips method).
- During down trending markets, traders look to enter the market near the upper band (sell on rallies method).
The indicator offers some input parameters that can be adjusted: period, deviations and price.
Make yourself familiar with this indicator and test it first on a demo account. It supports all time frames and Forex pairs.
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The following chart shows how the Weighted Deviation Bands indicator looks like when applied to the MT5 chart.
How To Buy And Sell Forex Pairs With The Weighted Deviation Bands Forex Indicator?
Find a simple trading example below:
- A buy signal occurs when the bands are sloping up and price touches the lower band.
- Open a buy trade and place the initial stop loss below swing support.
- Close the buy transaction as soon as price touches the upper band, or for a fixed profit target.
- A sell signal occurs when the bands are sloping down and price touches the upper band.
- Open a sell trade and place the initial stop loss above swing resistance.
- Close the sell transaction as soon as price touches the lower band, or for a fixed profit target.
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Frequently Asked Questions
How Do I Install This Custom Indicator On Metatrader 5?
- Open the MT5 trading platform
- Click on the File menu button located at the top left part of the platform
- Click on Open Data Folder > MQL5 folder > Indicators
- Copy the Weighted deviation bands.mq5 indicator file in the Indicators folder
- Close and restart the trading platform
- You will find the indicator here (Navigator window > Indicators)
- Drag the indicator to the chart to get started with it!
How Do I Edit This Indicator?
- Click in the open chart with your right mouse button
- In the dropdown menu, click on Indicator List
- Select the indicator and click on properties
- Now you can edit the inputs, colors, levels, scale and visualization
- Finally click the OK button to save the new configuration