The Volatility Hyper Trend indicator can be useful for those who prefer scalping in their trading. However, it can also be used in medium-term trading. But for this you have to choose the appropriate settings. The order of installing this indicator in MT4 is no different from the standard scheme. VHT is a trend indicator. In this regard, it is not recommended to trade on its signals during the flat period.
Optimizing the Volatility Hyper Trend indicator
In order to improve the effectiveness of this indicator, you can try to change its settings. There are two parameters to work with.
This market analysis tool generates signals based on an analysis of the degree of volatility. Using the ATRperiod parameter, you need to tell the indicator how many candles should be used in calculations.
The variable Multiplier is the level of anti-aliasing.
The rest of the parameters are not of great importance, since they are intended for setting up the visual appearance and notification of incoming signals. So, ArrowColorBUY, ArrowColorSELL, UpTrendWidth and DnTrendWidth are the colors of the indicator lines and arrows. Using the AlertOn and SoundFile parameters, you can configure the sound version of the alert. And the PopUpAlert parameter is designed to activate notifications.
How to trade with indicator signals
First, let’s see how it looks on the price chart:
Two lines are displayed in a separate window. If a two-color line changes its color from red to blue, and the line is above the green line, it means that a downward movement is forming in the market. You can open a sell trade. If a two-color line changes color from blue to red, and at the same time it is below the line colored green, it means that an upward movement is forming in the market. Consider opening a buy order.
But you can not follow these lines. To simplify the process of reading signals, the indicator draws corresponding arrows on the chart. If we see that a blue arrow appears on the chart – we buy, a red arrow – we sell.
As always, I want to warn you that before you can trade for real money using Volatility Hyper Trend signals , you need to test its work on a demo account. Besides, I would recommend choosing a second indicator that will filter the signals coming from the VHT.