VH Indicator

VH Indicator helps provide traders with a basic trend-following forex trading solution. This indicator’s signal demonstration method is turned into basic moving average trading. As a result, anyone, from beginners to seasoned traders, may grasp this forex trading indicator. The VH Indicator can be used to trade any forex currency pair that is posted on the financial markets. Furthermore, it is appropriate for both scalping and intraday trading.

What is the VH Indicator?

The VH indicator combines indicators to generate its forex trading signals. It is a trend following indicator that displays the BULLISH and BEARISH trends in the chart window as continuous dots. As a result, the trend is visually displayed. As a result, forex traders may readily interpret the trading signals and conduct BUY or SELL trades as needed. The indicator is suitable for both novice and experienced forex traders. New traders may quickly detect BULLISH and BEARISH trends and use the trading signals accordingly. Advanced forex traders can use this approach as a standalone indicator or in conjunction with other indicators. The indicator is effective in detecting market trends. As a result, forex technical traders can use this indicator to detect the trend first, and then add an oscillator to validate the trading signals. Once the trend direction is recognized, traders may find it simple to examine the market.

Setting up the VH Indicator
Setting up the VH Indicator

VH Strategy

The indicator depicts the BEARISH trend in RED dots and the BULLISH trend in BLUE dots. When the indicator turns BLUE, it indicates the start of a BULLISH trend, and forex traders can place a BUY trade. The previous swing low could be used as the stop loss for this trade, and the take profit target could be the opposite trade signal. If the indicator changes to RED, forex traders can enter a SELL position. Traders can keep an eye on the indicator and hold positions until the indicator changes color, which indicates the end of the current trend. Furthermore, for this situation, the optimal area for a stop loss could be above the previous swing high. The indicator performs in all intraday time frames as well as on daily, weekly, and monthly price charts. Because the indicator detects trend across all timeframes, it is suitable for any multi-timeframe (MTF) technical trading strategy. Higher time frame trends tend to last longer and are more stable than lower time frame trends. As a result, forex traders can spot the primary trend using the higher time frame chart. Using the principal trend’s direction, traders can place trades in the same direction on a smaller time frame chart. In effect, the trader can determine the best entry price while also planning an early exit.

Buy Signal

The following could be your checklist for a buy trade:

  • When the indicator’s dots turn blue in color.
  • When price closes above the indicator level.

Once these events occur:

  • You could open a buy position after you confirm your entry with bullish candlestick patterns.
  • You could set your stop loss just below the nearest swing low.
  • You could set your take profit at the nearest resistance zone, or you could exit trade when the indicator’s dots turn red in color.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
VH Indicator Buy Setup
VH Indicator Buy Setup

Sell Signal

The following could be your checklist for a sell trade:

  • When the indicator’s dots turn red in color.
  • When price closes below the indicator level.

Once these events occur:

  • You could open a sell position after you confirm your entry with bearish candlestick patterns.
  • You could set your stop loss just above the nearest swing high.
  • You could set your take profit at the nearest support zone, or you could exit trade when the indicator’s dots turn blue in color.
  • For good risk management, I would only consider trades with a risk to reward ratio of at least 1:2.
VH Indicator Sell Setup
VH Indicator Sell Setup

VH Pros & Cons

Pros

Cons

  • The VH Indicator may not be very suitable for scalping on the smaller timeframes.
  • Lagging of the indicator sometimes may negatively affect the trader’s risk to reward ratio.

Conclusion

The VH indicator is a nice technical tool for forex trend traders. The primary purpose of trend traders is to determine if the trend is BULLISH or BEARISH. This indicator does its best to help traders discover trends to BUY or SELL and ride them till the end. As a result, it is ideal for any trend-based forex technical trading approach; however, this indicator does not guarantee profits.

Free Forex Robot