Top 10 Trend Reversal Indicators For MT4Anastasiia
Most forex traders are trend traders and follow the trend using various technical indicators. Trend following is indeed the best technical trading strategy. But the problem lies in identifying the reversal of an existing trend. A trend reversal signals the beginning of a new trend in many instances, though the market may stay sideways otherwise.
Most traders will agree that identifying the reversal of an existing market trend is as important as identifying the beginning of a new market trend. The failure to identify price trend reversal costs the trader. No matter whether the forex trader is a new trader or an advanced forex trader.
On the other hand, traders can successfully identify a bullish or bearish trend reversal using various methods. Such as Support and Resistance, Oscillators, Momentum, Fractals, Moving averages, Pivot Points, and Divergences.
Though the indicators apply various methods to calculate, the result is to identify the existing trend. And measure their strength and eventually signal a potential reversal.
A plethora of MetaTrader indicators is available at the disposal of the forex trader to identify the trend reversals and buy and sell accordingly. Let’s look at the best 10 trend reversal indicators and discuss them. Traders can use the indicators as a stand-alone or combine them to trade with confluence.
Top 10 Trend Reversal Indicators For MT4
- Lucky Reversal Indicator
- Forex Reversal Indicator
- A-Gimat Reversal Indicator
- Bank Level Indicator
- Momentum Reversal Detector Indicator
- Reversal Fractals Indicator
- Trend Reversal Indicator
- Stop Reversal Indicator
- Trend Market Reversal Indicator
- Pivot Points All-In-One Indicator
Lucky Reversal Indicator
The first indicator is the Lucky reversal indicator which provides buy and sell signals with some special forex trend reversal features. The indicator signals a bullish trend reversal with a blue arrow and a bearish trend reversal with a red arrow.
The Lucky reversal indicator signals a trend change in the form of blue and red arrows, each followed by wavy horizontal lines. The blue arrow marks the beginning of an uptrend while the red arrow signifies a market reversal to the downtrend.
This MT4 indicator has a unique feature, a white square that appears when the indicator is suggesting a temporary or potential reversal. This feature makes the indicator interesting as it not only provides a trend reversal confirmation. But also alerts of potential reversals.
Traders should keep in mind that the Lucky reversal MetaTrader4 indicator is a lagging indicator. Moreover, the white square changes into a buy or sell signal once the bullish or bearish market trend is confirmed. As a result, the indicator comes in very handy in trading. It alerts a potential reversal and provides a signal once the trend reversal is confirmed.
Instead of jumping on every buy and sell signal, the best trading method is to wait for the signal. As we now know the market trend direction, we can identify trading opportunities in the trend direction in confluence with other indicators like support and resistance, trend line breakouts, and channels.
The horizontal wavy lines act as a stop loss, but the profit booking depends on the traders. To summarize the indicator helps both new and advanced forex traders and is effective in providing trend reversal signals.
Forex Reversal Indicator
The next trend reversal indicator on the list is the forex reversal indicator. It is one of the most reliable price trend reversal indicators. The trading signals are in the form of yellow dots coated in red and blue rings.
The entry signals of the forex reversal indicator for MT4 are quite simple and straightforward. The yellow dot in the red rings signals a potential downward price trend reversal. On the other hand, traders anticipate a possible upward market trend reversal once the blue rings around yellow dots appear on the price chart.
Successful traders will agree that trading using multi-timeframe technical analysis produces profitable results.
The forex trend reversal indicator works well for forex traders using multi-timeframe ( mtf ) technical trading strategies. The top-down analysis helps the traders to break down the trend direction and stay in the trend direction of higher time frame price charts.
An important point to accept and understand before using the forex reversal indicator is the repainting nature of this indicator. Let’s not get into the argument about the effectiveness of indicators that repaint. Rather, traders who are able to apply the indicator with a repainting nature can produce successful trading results.
The forex reversal indicator is best suitable for expert and intermediate swing and position forex traders. Scalpers may not be that successful using this indicator.
A-Gimat Reversal Indicator
Our third indicator on the list is the A-Gimat reversal indicator for MT4. This indicator works well for scalpers and intraday traders as the signal frequency can be adjusted using the input settings to suit the trading style.
The driving force behind this MetaTrader4 indicator is the classic ZigZag indicator. The indicator automatically scans for the price high and low. It provides arrow signals once a trend reversal level is identified.
An up arrow indicates a potential bullish trend reversal and signals to enter the market with a Buy position. While the down arrow signals the possible bearish trend reversal for a sell trade.
Traders can hold the positions until the opposite signal and book profits, with a stop loss below or above the previous swing low based on the entry position.
As the A-Gimat reversal indicator auto-calculates the high and low, traders should be cautious as there is a possibility of the last arrow being redrawn. Once a new high or low is formed the indicator adapts to the new data and applies the new high to calculate the trend reversal.
The indicator works well in both lower and higher time frame price charts. As mentioned earlier the frequency of the trading signals can be adjusted and helps the scalpers and intraday traders. Once applied new and advanced traders will appreciate the simplicity and accuracy of this forex trend reversal indicator.
Bank Level Indicator
Let’s move on to the next simple yet powerful trend reversal indicator on the list. The Bank Level Indicator for MT4 automatically draws key bank levels on the MT4 chart and helps the trader identify price reversal levels with significance.
There is a significant difference between the trading methodology of retail traders and institutional traders such as the big financial institutions and the banks. A well-known fact is the ability of these market makers in influencing the price movements of the forex market.
The financial institutions strategically place buy or sell orders with huge positions sizes at key physiological levels, collectively mentioned as the bank levels. The bank level indicator identifies these levels automatically and plots them on the price charts.
The idea behind this MT4 indicator is to enter the markets at the same levels as the big financial institutions. And eventually, stay in the bullish or bearish direction of the institutional players.
The indicator plots the current day’s level in green and the next day’s levels as lime color. These levels act as key support and resistance levels or pivot points. So technical forex traders look for price rejection at these levels using Japanese candlestick patterns, chart patterns, or price action. Once a price rejection is confirmed, traders can buy or sell accordingly.
In effect, the bank level indicator for MT4 helps the retail trader to trade in line with institutional traders.
Momentum Reversal Detector Indicator
We are halfway through the list and it’s getting more interesting. Our next indicator is versatile and applies momentum to identify the trend reversals. Furthermore, the momentum reversal detector indicator for MT4 scans for divergence and acts as a leading indicator in identifying trend reversals.
To make things more interesting the indicator scans for momentum in higher time frames and is best suitable for multi-timeframe (mtf) technical trading strategies.
It identifies key intraday reversal points and plots as a histogram.
Another important feature of the momentum reversal indicator is the ability to identify divergence in the current chart time frame and also the higher time frame charts. This feature makes the indicator a leading indicator and alerts the trader of an impending reversal in advance. So, the indicator fits in the trading arsenal of forex trend traders, momentum traders, and divergence traders.
Identifying entry points is pretty simple, the histogram displays the trend signal changes as a black bar. So, forex traders should buy or sell at the appearance of a black histogram bar. If a positive momentum is detected on a higher time frame chart, the background color of the indicator window changes to Pale green.
Similarly, the indicator window’s background color changes to magenta for a bullish divergence and shows Lime for a bearish divergence.
This momentum reversal detector indicator not only detects momentum but also detects divergence, with the histogram and color changes it is very helpful for new and advanced forex traders.
Reversal Fractals Indicator
Let’s now move to the sixth indicator in our list, the reversal fractals indicator for MT4. Fractals are a universally accepted fact that exists in nature. No wonder fractals are present in the price movements of financial instruments. The key is to understand and identify the fractal nature and apply that in identifying the entry points.
A fractal is identified using the highs and lows. In a bearish fractal, the higher high candlestick appears in between two lower high candlesticks. On the other hand, in a bullish fractal, a lower low candlestick appears in between two higher lows.
The reversal fractals indicator signals the trend reversal with arrows on the up or downside of the price. A bullish reversal signal occurs if the blue arrow is below the price and in a bearish trend reversal signal the red arrow appears above the price.
On the flip side, this MetaTrader4 indicator produces many trading signals which may result in overtrading and may produce false signals. This may be particularly difficult for intraday trading using lower time frame charts.
For best trading results traders should combine the reversal signals of this indicator with support and resistance zones.
Generally, the reversal signals near the trend line, channels produce much better trading results.
The reversal fractal indicator is simple to trade using the trading signals for new forex traders and advanced forex traders.
Trend Reversal Indicator
The next indicator on the list is an oscillator based on two exponential moving averages. As the buy and sell signals are based on the bullish and bearish crossover of the slow and fast-moving averages, the indicator produces good trend reversal trading signals.
This trading indicator works on all intraday price charts as well as higher timeframes like daily, and weekly charts. So, no matter if you are a scalper, short-term trader, or long-term trader the trend reversal indicator for MT4 works for you.
The indicator is flexible and can be easily adjusted using the input settings making it adapt to the trader’s personal preferences.
Entry rules are based on the crossover, so a buy signal is generated when the fast EMA crosses above the slow EMA. In other words, when the blue line crosses the red line upwards.
The reverse is true for a sell signal. The best exit trading strategy is to exit at the opposite crossover signal.
The trading signals are straightforward, so new and advanced forex traders can trade them easily.
Stop Reversal Indicator
The next indicator on the list is very simple and easy to trade while providing profitable forex trading signals. The stop reversal indicator for MT4 identifies bullish and bearish market reversal points and provides arrow signals.
This MetaTrader indicator provides a blue arrow signal for a bullish market reversal while providing a red arrow signal for a bearish market reversal. The best exit strategy is to hold the position until the opposite trading signal and ride the trend.
The stop reversal indicator is very effective in top-down technical analysis. Traders can identify the trend direction in a higher time frame chart and use the lower time frame chart signals to enter in the same direction.
As mentioned earlier, the simplicity of this indicator helps the new and advanced forex traders and suits all types of trading strategies.
Trend Market Reversal Indicator
We are nearing the bottom of the list. The ninth indicator on the list is based on two exponential moving averages. The forex trading signals are based on the crossover of the slow exponential moving average and the fast exponential moving averages.
The trend market reversal indicator provides multiple trading signals, though the signal frequency can be adjusted by changing the input settings of the moving averages. So, this MetaTrader indicator suits well for all trading strategies like scalping, intraday, short and long term.
If the blue line moves above the olive line, it indicates a bullish trend, so traders can enter the market with a Buy. Similarly, if the red line moves above the blue line, it indicates the beginning of a bearish market trend and provides a sell signal.
As a crossover-based indicator new and advanced traders can trade it easily. However, for best results traders should trade in confluence with other technical indicators.
Pivot Points All-In-One Indicator
The last but not the least indicator on our list is the Pivot Points All-In-One Indicator. This MetaTrader indicator is based on identifying potential trend reversal points using pivot levels. Various methods are used to calculate pivot points using the high, low, open, and close of the previous trading session.
The indicator automatically calculates and plots the Pivot points. The pivot points act as support and resistance and in turn, are potential trend reversal zones. So, traders looking for market reversal signals using candlestick patterns, price rejection techniques, and in confluence with other technical indicators.
The pivot points act as potential entry points and also act as taking profit and stop-loss levels. So, technical forex traders enter the market and place the stop loss and take profit to the nearest pivot point.
The indicator plots support and resistance up to 4 levels. Though all the pivot levels indicate a potential reversal point. The farther the support or resistance is, the higher the possibility of a potential trend reversal.
The pivot points all in one indicator for MT4 provides the option to construct the pivot points using various methods like the Classical, Woodie, Fibonacci, Camarilla, and Central Pivot Range (CPR)
However, the purpose of all the various methods is to identify the potential trend reversal point. But the indicator does not confirm the trend reversal. So, it is necessary to apply other technical tools to confirm trend reversal before entering the market.
The above list provided the best trend reversal indicators for MT4 that provides profitable results. Though new and advanced traders can trade using use most of them. The best strategy is to practice them in demo trading and familiarise themselves to find an edge in trading.
To conclude, trading with the confluence of a few of these indicators on the list will have profitable results.