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HomeForex MT5 IndicatorsVWAP Bands Indicator

VWAP Bands Indicator

Introduction to the VWAP Bands Indicator

The VWAP Bands Indicator is similar to the Bollinger Bands, but to calculate its values it uses Volume-Weighted Average as the central value of the bands. Additionally, you can choose an option to use the tick volume or real volume for calculation (only in the case, if the symbol and the broker are having real volume at all). What’s more, you can choose to have deviations calculated with or without sample correction.

The VWAP Bands Indicator fits all kinds of timeframes and currency pairs. It is displayed directly on the main trading chart. The default settings can be modified directly from the input tab. Feel free to experiment with the settings and parameters to fit your personal preferences.

How does it work? How to apply in trading?

Trading Rules Explanation

As you can notice, VWAP Bands Indicator displays three bands to each side. Each of the bands can be turned on or off. If the deviations multiplier for any of the bands is set to zero, then that bands are not going to be calculated. Check these general instructions for trading with that VWAP Bands indicator.

Buy Signal

Follow these steps for a long trade:

  • General trend is bullish
  • Price touches lower outer band (thick orange line)
  • Price rejects that level and swings higher from recent low swing
  • Buy trade is triggered after the first candle meeting above conditions
  • Set stop loss a few pips below the last swing low of the market
  • Take profit or exit whenever the price tocuhes opposite band or use your own method of trade exit

VWAP Bands Indicator Example of Buy Trade

Sell Signal

Follow these steps for a short trade:

  • General trend is bearish
  • Price touches upper outer band (thick green line)
  • Price rejects that level and swings lower from recent high swing
  • Sell trade is triggered after the first candle meeting above conditions
  • Set stop loss a few pips above the last swing high of the market
  • Take profit or exit whenever the price tocuhes opposite band or use your own method of trade exit

VWAP Bands Indicator Example of Sell Trade

As always, to achieve good results, remember about proper money management. To be a profitable trader you need to master discipline, emotions, and psychology. It is crucial to know when to trade, but also when not to trade. Avoid trading during unfavorable times and market conditions like low volume/volatility conditions, beyond major sessions, exotic currency pairs, wider spread, etc.

How to set up the VWAP Bands indicator in MT5?

Installation Guide

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.

Bottom Line

The VWAP Bands indicator is well worth adding to your trading collection. A good forex indicator will most probably enhance your chance of success. Nonetheless, remember about having realistic expectations. Just like any other technical analysis tool, is not capable of providing 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 own trading system based around it. Don’t forget that we still have more great free forex indicators to try.

Download Free Forex MT5 VWAP Bands Indicator

To download the VWAP Bands Indicator for Metatrader 5 (MT5) for free just click the button below:

VWAP Bands Indicator Free Download

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