About the Reversal Bar Candle Indicator
The Reversal Bar Candle Indicator for MT5 identifies simple candlestick patterns that may signal potential bullish or bearish trend reversals.
It highlights these patterns directly on the price chart using a clear color scheme, helping traders react quickly to shifting momentum.
A blue candle represents a bullish reversal bar. A red candle represents a bearish reversal bar.
A gray candle represents a neutral bar with no active reversal signal.
These visual signals make it easier to spot potential turning points without manually scanning for patterns.
For stronger accuracy, combine this indicator with the MACD indicator. When the MACD is above the zero line, the trend is considered bullish.
When the MACD is below zero, the trend is considered bearish.
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reversalbar.mq5 Indicator (MT5)
Key Features
- Identifies bullish and bearish reversal candlestick patterns.
- Blue candle signals a potential bullish reversal.
- Red candle signals a potential bearish reversal.
- A gray candle indicates neutral market conditions.
- Customizable colors and display style.
- Works effectively when combined with MACD trend confirmation.
- Suitable for multiple timeframes and trading styles.
Indicator Chart
The Reversal Bar Candle Indicator displays blue, red, and gray candles directly on the price area to highlight potential reversal zones.
When a blue candle forms while MACD remains above zero, it signals bullish continuation within an uptrend.
When a red candle forms while MACD is below zero, it signals bearish continuation within a downtrend.
Traders use this alignment to improve entry timing.
Guide to Trade with Reversal Bar Candle Indicator
Buy Rules
- Buy condition: MACD must be above the zero line, confirming a bullish trend.
- The market should show an overall upward direction.
- A blue reversal candle must appear on the chart.
- Enter a buy trade at the close of the blue candle.
Sell Rules
- Sell condition: MACD must be below the zero line, confirming a bearish trend.
- The market should show an overall downward direction.
- A red reversal candle must appear on the chart.
- Enter a sell trade at the close of the red candle.
Stop Loss
- For buy trades, place the stop loss below support.
- For sell trades, place the stop loss above resistance.
Take Profits
- Close the buy trade at a fixed take profit target that fits your plan.
- Close the sell trade at a fixed take profit target that fits your plan.
- Alternatively, close the buy trade if MACD drops back below zero.
- Alternatively, close the sell trade if MACD rises back above zero.
Reversal Bar Candle and Envelopes MT5 Scalping Strategy
This scalping strategy focuses on catching short-term reversals within a defined trend channel.
By combining the Reversal Bar Candle Indicator for MT5 with the Envelopes Indicator MT5, traders can identify precise turning points while staying aligned with the broader direction.
The Reversal Bar Candle indicator highlights potential turning points using color-coded candles.
The Envelopes indicator creates a channel around price, reflecting trend direction and dynamic support and resistance.
When the channel slopes upward, the market shows bullish pressure. A downward slope reflects bearish conditions.
This allows traders to trade with the trend instead of against it.
This strategy works well on M1 and M5 timeframes where quick reactions matter.
It suits Forex traders who prefer fast entries near dynamic support or resistance and aim for small but consistent gains during active sessions.
Buy Entry Rules
- Confirm that the Envelopes channel is sloping upward.
- Wait for price to retrace toward the lower band of the channel.
- Look for a blue reversal candle forming near the lower boundary.
- Enter a buy trade at the close of the reversal candle.
- Place the stop loss slightly below the lower band or recent low.
- Take profit near the upper band of the channel or close early if a red reversal candle appears.
Sell Entry Rules
- Confirm that the Envelopes channel is sloping downward.
- Wait for price to retrace toward the upper band of the channel.
- Look for a red reversal candle forming near the upper boundary.
- Enter a sell trade at the close of the reversal candle.
- Place the stop loss slightly above the upper band or recent high.
- Take profit near the lower band or exit early if a blue reversal candle appears.
Case Study 1: EUR/USD M5 Pullback Entry
On the M5 timeframe, EUR/USD was trending upward with the Envelopes channel clearly sloping higher.
Price pulled back toward the lower band, showing a temporary slowdown in bullish momentum.
A blue reversal candle formed right at the lower boundary, indicating a potential continuation.
A buy trade was entered at candle close with the stop loss placed just below the recent low.
Price moved back toward the upper band in a steady push.
The position was exited near the upper channel area, securing 23 pips.
Case Study 2: GBP/JPY M1 Intraday Reversal
During a fast-moving New York session, GBP/JPY showed a clear downward slope in the Envelopes channel on the M1 timeframe.
Price retraced upward toward the upper band before losing strength.
A red reversal candle appeared near the upper boundary, signaling a short opportunity.
A sell trade was taken immediately after confirmation. The stop loss was placed above the recent spike high.
Price dropped quickly as selling pressure returned.
The short trade captured a small 8 pip profit before a minor bounce prompted an exit.
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reversalbar.mq5 Indicator (MT5)
FAQ
What type of reversal patterns does the indicator detect?
The indicator focuses on strong single-bar reversal formations that reflect sudden shifts in buying or selling pressure.
These patterns often appear after extended moves and can signal potential turning points when aligned with trend confirmation.
How important is trend confirmation when using this indicator?
Trend confirmation is essential.
Using the MACD zero line as a filter helps you trade in the dominant direction.
When MACD is above zero, focus on blue reversal candles.
When MACD is below zero, prioritize red reversal candles.
What market conditions should I avoid?
Avoid highly ranging or low-volatility environments where price lacks direction.
Reversal signals tend to perform better after strong impulsive moves rather than during sideways consolidation phases.
Summary
The Reversal Bar Candle Indicator highlights potential turning points using simple color-coded candlestick patterns.
Blue and red candles make reversal identification straightforward and practical.
When combined with MACD confirmation, it becomes a disciplined trend-aligned strategy.
With proper testing and realistic expectations, this indicator can support structured entries and exits across multiple market conditions.
