2 Bar Reversal Forex Indicator (MT4)

About the 2 Bar Reversal Forex Indicator

The 2 Bar Reversal Forex Indicator for MT4 is a simple yet powerful price action tool designed to identify short-term trend reversals in the forex market.

It works by detecting specific two-candle reversal formations and plotting buy or sell arrows accordingly.

This makes it highly effective for scalpers, intraday traders, and swing traders who rely on clean chart patterns rather than complex indicators.

Key Features

• Identifies bullish and bearish 2-bar reversal patterns automatically
• Works on all major currency pairs and timeframes
• Provides clear buy and sell signals with visual arrows
• Non-repainting indicator – once a signal appears, it stays
• Lightweight and user-friendly for beginners and advanced traders alike

How the Indicator Works

The indicator scans price action and looks for specific two-candle patterns where one candle fully engulfs the other, suggesting a strong reversal.

When such a pattern is detected:

• A blue arrow appears below the candle, signaling a potential buy opportunity
• A red arrow appears above the candle, signaling a potential sell opportunity

These visual signals help you react quickly and confidently to trend changes, especially when used with confirmation tools like support/resistance or moving averages.

Benefits

• Removes emotional decision-making with clear visual entries
• Helps you enter trades at the beginning of new trends
• Works well alone or in combination with trend-following tools
• Great tool for timing entries on pullbacks or reversals

Free Download

Download the “2-bar-reversal-indicator.mq4” indicator for MT4

Indicator Chart

The 2 Bar Reversal Indicator is attached to the EUR/USD 4-Hour chart in the example below.

How to Trade Forex Using the Indicator

Buy Entry

• Wait for a blue arrow to appear below the price bar
• Enter a long position on the opening of the next candle
• Set your stop loss a few pips below the lowest low of the last two candles
• Consider taking profit at 1:1.5 or 1:2 risk-to-reward, or use trailing stop

Sell Entry

• Wait for a red arrow to appear above the price bar
• Enter a short position on the opening of the next candle
• Set your stop loss a few pips above the highest high of the last two candles
• Take profit with a fixed R:R ratio or at the next support level

Download Now

Download the “2-bar-reversal-indicator.mq4” indicator for Metatrader 4

2-Bar Reversal + BOS/CHOCH MT4 Strategy

This powerful trading strategy combines the classic 2-Bar Reversal Indicator with the modern structure-based BOS/CHOCH MT4 Indicator.

The goal is to capture high-probability trade entries by detecting price action reversals and confirming them with market structure breaks or changes.

It is suitable for scalping, intraday, and even swing trading on any major forex pair and time frame from M15 and above.

What is this Strategy About?

The 2-Bar Reversal Indicator highlights potential reversal areas using bullish and bearish engulfing formations.

However, price can fake out and reverse.

That’s where the BOS/CHOCH (Break of Structure / Change of Character) Indicator comes in.

It filters those signals by showing when the market is genuinely shifting direction.

By combining both tools, we wait for a 2-bar reversal signal and only take action when the BOS/CHOCH indicator confirms a break of the previous trend structure.

This avoids many false signals and increases trade confidence.

Buy Setup Rules

• Wait for a bullish signal from the 2-Bar Reversal Indicator.
• Confirm the signal with a BOS or CHoCH indicating bullish structure from the BOS/CHOCH Indicator.
• Entry: Open a buy position at the close of the confirmation candle.
• Stop Loss: Set below the lowest point of the reversal pattern or structure low.
• Take Profit: Target a 1:2 or 1:3 risk-reward ratio or use the next market structure high.

Sell Setup Rules

• Wait for a bearish signal from the 2-Bar Reversal Indicator.
• Confirm the signal with a bearish BOS or CHoCH from the BOS/CHOCH Indicator.
• Entry: Open a sell position at the close of the confirmation candle.
• Stop Loss: Set above the high of the 2-bar formation or structure high.
• Take Profit: Use a fixed risk/reward ratio (1:2 or 1:3) or target the next support level.

Advantages of the Strategy

• Combines price action and market structure for a powerful confirmation system.
• Reduces false entries often caused by using reversal indicators alone.
• Works across multiple timeframes and market conditions.
• Clear entry and exit rules make it easy to automate or backtest.

Drawbacks

• The strategy may miss early entries while waiting for confirmation.
• Performance can vary in ranging markets where the structure is unclear.
• Requires patience and discipline to wait for confluence signals.

Strategy Conclusion

This 2-Bar Reversal + BOS/CHOCH strategy is ideal for traders who prefer confirmation-based entries with structured logic behind them.

By filtering reversal patterns with market structure changes, traders can reduce noise and improve overall trading accuracy.

Indicator Specifications

Final Words

The 2 Bar Reversal Indicator is a solid tool for traders who prefer clean chart-based setups without unnecessary clutter.

Whether you’re a price action enthusiast or someone who wants to add precision to your entries, this indicator gives you an edge by spotting high-probability reversal points.

Use it alone or combine it with trend-following tools for maximum effectiveness.

Download the indicator now and start trading smarter!