The Tail Bar indicator for Metatrader 5 displays bullish and bearish tail bars in a dedicated chart window.
It’s a price pattern that can help traders to enter and exit trades with better precision.
How Does It Work?
A positive tail bar is colored sea-green, while a negative tail bar is colored magenta.
This indicator provides customization options to suit individual preferences: tail bar up color, tail bar down color.
To maximize its effectiveness, the Tail bar indicator is best used in conjunction with other price action techniques and strategies.
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Trading Chart Example
The following picture displays what the Tail Bar indicator looks like when applied to the MT5 chart.
Tail Bar Reversals with Trend Confirmation MT5 Trading Strategy
This strategy pairs the Tail Bar Indicator, which identifies price rejection and reversal signals through tail bars, with the Forex Trendy Indicator to confirm the prevailing trend direction.
This helps traders enter reversal trades with trend confirmation for higher accuracy.
Indicators Used
- Tail Bar Indicator: Detects candlesticks with long tails/wicks signaling potential price reversals.
- Forex Trendy Indicator: Confirms the current market trend to align entries with the dominant momentum.
Timeframes
Works well on M15, M30, and H1 charts for intraday and short-term trading setups.
Buy Entry Rules
- The Tail Bar Indicator identifies a bullish reversal tail bar (long lower wick indicating rejection of lower prices).
- The Forex Trendy Indicator signals a bullish trend or is turning bullish.
- Enter a long trade at the close of the tail bar candle or on the next candle, confirming upward momentum.
- Place a stop-loss just below the low of the tail bar candle.
- Set a take profit at the next resistance zone or based on a favorable risk-reward ratio.
Sell Entry Rules
- The Tail Bar Indicator detects a bearish reversal tail bar (long upper wick showing rejection of higher prices).
- The Forex Trendy Indicator signals a bearish trend or turns bearish.
- Enter a short trade on the close of the tail bar candle or next confirming bearish candle.
- Place a stop-loss just above the high of the tail bar candle.
- Target the next support area or use proper risk management for exits.
Strategy Tips
- Focus on tail bars occurring near support or resistance levels for stronger reversal signals.
- Trade only when the Forex Trendy Indicator confirms or aligns with the tail bar signal.
- Avoid tail bars in sideways or low-volatility markets as false signals may increase.
Conclusion
Combining reversal price action signals from the Tail Bar Indicator with trend confirmation from the Forex Trendy Indicator provides a disciplined approach to trading high-probability reversals aligned with the market trend.
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Frequently Asked Questions
How Do I Install This Custom Indicator On Metatrader 5?
- Open the MT5 trading platform
- Click on the File menu button located at the top left part of the platform
- Click on Open Data Folder > MQL5 folder > Indicators
- Copy the tail_bar.mq5 indicator file in the Indicators folder
- Close and restart the trading platform
- You will find the indicator here (Navigator window > Indicators)
- Drag the indicator to the chart to get started with it!
