The 1-2-3 Reversal Points Pattern Forex indicator for MT4 identifies the best trend reversal points based on the popular 1-2-3 trading pattern.
The indicator is beginner-friendly and draws buy and sell arrows on the chart once the bullish or bearish trend reversal pattern has completed.
In essence, you only need to follow the buy and sell arrows.
Indicator explained (bullish example)
- Point 1: low
- Point 2: higher high
- Point 3: most recent low but higher than point 1
After downloading and installing the indicator on the MT4 trading platform, it should look like the image shown below.
Key Features
- Scans for trend reversal
- Based on the 1-2-3 trading pattern
- Price action
- No-lagging indicator
- Well worth adding to your indicator collection
This indicator can work together with any existing trading strategy or system as a simple buy/sell trend reversal entry confirmation tool.
Free Download
Download the “1-2-3 Reversal Points Pattern.ex4” MT4 indicator
Example Chart
The EUR/USD 5-minute chart below shows the 1-2-3 Reversal Points Pattern indicator in action.
Simple Trading Signals
Signals from the 1-2-3 Reversal Points Pattern indicator for Metatrader 4 are easy to interpret and go as follows:
BUY:
- Open a long trade when the blue arrow appears on the chart (bullish trend reversal).
- Place a stop loss below the most recent swing low point.
- Take profit at key resistance.
SELL:
- Open a short trade when the red arrow appears on the chart (bearish trend reversal).
- Place a stop loss above the most recent swing high point.
- Take profit at key support.
Download Now
Download the “1-2-3 Reversal Points Pattern.ex4” MT4 indicator
Trend Continuation Strategy with 1-2-3 Reversal Pattern
The 1-2-3 Reversal Points Pattern Indicator MT4 is designed to spot potential turning points in the market.
You can use this tool not just to trade reversals, but also to enter trend continuation trades with higher precision.
Recommended Setup
- Chart Timeframe: 15-minute (M15) or 1-hour (H1)
- Indicator: 1-2-3 Reversal Points Pattern Indicator MT4
- Additional Tool: 50-period Exponential Moving Average (EMA) to define the trend direction
Buy Entry Conditions
- Price is trading above the 50 EMA (indicating an uptrend).
- The indicator identifies a 1-2-3 reversal pattern with the pattern low forming near the EMA (point 3 must be higher than point 1).
- Enter a buy trade when the price breaks above point 2 of the pattern.
Sell Entry Conditions
- Price is trading below the 50 EMA (indicating a downtrend).
- The indicator shows a 1-2-3 pattern with the high forming near the EMA (point 3 must be lower than point 1).
- Enter a sell trade when the price breaks below point 2 of the pattern.
Stop Loss and Take Profit
- Stop Loss: Just beyond point 3 of the pattern.
- Take Profit: 1.5x or 2x the stop loss distance, or use the next support/resistance level.
Strategy Notes
- For best results, trade in the direction of the major trend using the 50 EMA as a filter.
- Be cautious around major news events—use the Forex News Indicator to stay informed.
- This strategy works best during high-volatility market sessions like London or New York.
Indicator Settings & Parameters
Fonts, colors, Gann, alerts
Feel free to explore the indicator’s different parameters and settings to create your own personalized indicator setup.
More Info About This Indicator
Currency Pairs: works on any currency pair
Trading Platform: developed for Metatrader 4 (MT4)
Time Frames: works on any time frame
Indicator Type: Trend reversal
Final Thoughts
The 1-2-3 Reversal Points Pattern Indicator for MT4 is an effective tool for traders looking to identify potential trend reversals with clarity and precision.
By detecting the classic 1-2-3 pattern, it provides timely buy and sell signals that help traders make informed decisions in fast-moving markets.
This indicator is suitable for multiple timeframes and currency pairs, offering flexibility for both short-term and longer-term trading strategies.
Its clear visual alerts and straightforward signals make it accessible for traders of all experience levels, allowing for quick interpretation and execution.
