The Hodrick-Prescott Channel Forex Indicator for MT4 is a price channel based on the forex Hodrick-Prescott digital filter, and it’s available below for free download. Instead of having static chart support and resistance levels, it plots dynamic chart bands that adjust to the ongoing price action. As a result, a forex trader receives more accurate entry points.
![hodrick-prescott-channel-indicator](https://www.forexcracked.com/wp-content/uploads/2023/02/hodrick-prescott-channel-indicator.webp)
Are you a fan of forex channel trading strategies? If so, let’s look at it and bring some practical forex trading examples.
Introducing the Hodrick-Prescott Channel Indicator
MT4 Forex Indicator Overview
The download link of the forex Hodrick-Prescott Channel MT4 indicator is placed at the end of this post. Once you’re done, your mt4 trading chart should look the same as the example below.
![hodrick-prescott-channel-explanation](https://www.forexcracked.com/wp-content/uploads/2023/02/hodrick-prescott-channel-explanation.webp)
As you can see, it consists of two chart elements, two bands that create a channel called VHP, and a 21-period moving average(MA) line called HP Trend. There is also a middle dashed line that separates bearish and bullish market conditions.
The Hodrick Prescott Channel forex indicator is meant to catch price reversals. So when it comes to an understanding the HPC, it’s essential to know that when the 21-HP Trend indicator moves below the middle dashed line and the price rejects the lower chart channel band, it signals a bullish chart trend in the market. Conversely, if the price rejects the upper chart band when the HP Trend rises to the second half of the charted channel, it suggests a bearish market trend.
That forex indicator tracks price action changes and automatically plots channels to identify market support and resistance levels. The key to using this tool effectively is to buy at chart support levels and sell at resistance levels, all while following the overall trend direction.
Settings
You can customize a few variables to fit your preferences or trading strategy.
![hodrick-prescott-channel-settings](https://www.forexcracked.com/wp-content/uploads/2023/02/hodrick-prescott-channel-settings.webp)
How To Trade With The Forex Hodrick-Prescott Channel forex Indicator?
Generally speaking, the signal entry trigger is based on channel band rejection and then a reversal. So let’s dive into how to use that forex indicator precisely in a few easy steps.
Hodrick-Prescott Channel Indicator: Buy Signal
- 21 HP Trend dips below the chart channel middle line
- Price approaches the lower band and rejects it
- Channel should be leaned upwards
- Open long-entry trade when the above conditions are met
- Set stop loss(SL) a few pips below the most recent market’s low point
- First, take profit at the middle line, and second, take profit(TP) at the opposite band
![hodrick-prescott-channe-buy-signal](https://www.forexcracked.com/wp-content/uploads/2023/02/hodrick-prescott-channe-buy-signal.webp)
Hodrick-Prescott Channel Indicator: Sell Signal
- 21 HP Trend rises above the chart channel middle line
- Price approaches the upper band and rejects it
- Channel should be leaned downwards
- Open short entry trade when the above conditions are met
- Set stop loss(SL) a few pips above the most recent market’s high point
- First, take profit at the middle line, and second, take profit(TP) at the opposite band
![hodrick-prescott-channe-sell-signal](https://www.forexcracked.com/wp-content/uploads/2023/02/hodrick-prescott-channe-sell-signal.webp)
How to set up the Hodrick-Prescott Channel forex indicator in MetaTrader (MT4)?
Installation Guide
Download the Hodrick-Prescott Channel.zip archive at the bottom of this post, unzip it, then copy and paste the vhpchannel_03.ex4 or vhpchannel_03.mq4 indicator files into the MQL4 folder of the MT4 trading platform.
You can gain access to this data folder by clicking the top menu options, which goes as follows:
File > Open Data Folder > MQL4 > Indicators (paste here).
Now go to the left side of your Forex MT4 terminal. In the Navigator, find the gauge name, right-click it, and select Attach to the chart.
Conclusion
We find the Hodrick-Prescott Channel as a solid and worthy forex indicator. It’s essential to be very familiar with candlestick patterns, especially rejection and reversal patterns. Adding some filters for trade entry confirmation can be a good idea. Don’t forget that it uses a dynamic formula; thus, the channel may adjust its slope significantly during high-volatility market conditions.
Download the Free Forex Hodrick-Prescott Channel MT4 Indicator
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