The VWAP Bands MT5 Forex Indicator is similar to the Bollinger Bands indicator, but to calculate its values, it uses Volume Weighted Average as the central value of the indicator bands. Additionally, you can choose to use the tick volume or actual volume for calculation (only if the symbol and the broker have real volume at all). Moreover, you can choose to have deviations calculated with or without sample correction.
The VWAP Bands MT5 Forex Indicator fits all kinds of timeframes and mt5 currency pairs. It is shown directly on the main mt5 trading chart. The default indicator settings can be modified now from the input tab. Feel free to try it out with the settings and parameters to fit your preferences.
How does it work? How to apply in forex trading?
Trading Rules Explanation
As you can notice, VWAP Bands mt5 forex Indicator displays three bands on each side. Each of the indicator bands can be turned on or off. If the deviation multiplier for any of the indicator bands is set to zero, then that bands will not be calculated. Check these instructions for trading with that VWAP Bands forex indicator.
Follow these steps for a long trade:
- The general trend is bullish
- Price touches the lower outer band (thick orange color line)
- Price rejects that chart level and swings higher from a recent low swing
- Buy-entry trade is triggered after the first candle meets the above conditions.
- Set stop loss(SL) a few pips below the last swing low of the market.
- Take profit or exit whenever the price touches the opposite band or use your method of trade exit
Follow these steps for a short trade:
- The general trend is bearish
- Price touches the upper outer band (thick green color line)
- Price rejects that chart level and swings lower from a recent high swing
- Sell entry trade is triggered after the first candle meets the above conditions
- Set stop loss(SL) a few pips above the last swing high of the market
- Take profit(TP) or exit whenever the price touches the opposite band or use your method of trade exit
As always, to achieve best results, remember about proper money management. To be a good profitable trader, you must master discipline, emotions, and psychology. It is crucial to know when and when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility, beyond major sessions, exotic currency pairs, wider spread, etc.
How to set up the VWAP Bands indicator in MT5?
Download the VWAP Bands.rar archive at the bottom of this post, unpack it, then copy and paste the VWAP Bands.ex5 or VWAP Bands.mq5 indicator files into the MQL5 folder of the MetaTrader 5 trading platform.
You can gain access to this folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL5 > Indicators (paste here).
Now go to the left side of your MT5 terminal. In the Navigator, find the gauge name, right-click it, and select Attach to the chart.
The VWAP Bands indicator is well worth adding to your trading collection. A good forex indicator will enhance your chance of success. Nonetheless, remember to have realistic expectations. Like any other technical analysis tool, it cannot provide accurate signals 100% of the time. Thus, this forex indicator provides false signals occasionally. Its performance will vary significantly depending on market conditions. Feel free to develop your trading system based on it. Don’t forget that we still have more great free forex indicators to try.
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