2 Candles Forex Reversal Signal Indicator (MT4)

About the 2 Candles Forex Reversal Signal Indicator

The 2 Candles Forex Reversal Signal Indicator is a powerful MT4 tool built to identify high-probability trend reversals using a proprietary two-bar pattern.

Designed for both novice and experienced traders, it filters noise, highlights key turning points, and helps streamline trade entries.

Key Features

• Simple reversal logic: Indicates highs and lows using two-bar candlestick reversals
• Visual alerts: Colored arrows appear directly on the chart for Buy/Sell signals
• Customizable inputs: Adjust look-back period, alert settings, and colors
• Multi-timeframe support: Effective across M5, M15, H1, H4 for various trading styles
• Non-repainting: Once plotted, signals remain fixed and reliable

Free Download

Download the “2-candles-pilot-indicator.mq4” indicator for MT4

Trading Chart

Below is an example of the 2 Candles Forex Reversal Signal Indicator applied to an M5 EUR/USD chart, clearly showing entry points as the trend reverses.

How to Trade Using This Indicator

Initiating Trades

• Buy: Initiate when a bullish reversal arrow forms at/above support
• Sell: Initiate when a bearish reversal arrow forms at/below resistance

Stop-Loss & Take-Profit

• Stop-Loss: Set just below the reversal low (for Buys) or above the high (for Sells), typically 3–5 pips away
• Take-Profit: Aim for recent swing levels, use a 2:1 reward/risk ratio, or trail the stop as price moves in your favor

Example Entry

1. Bearish signal forms at 1.1050
2. Place Sell order at 1.1048 (after confirming signal on candle close)
3. Set Stop-Loss at 1.1065 (above recent high)
4. Set Take-Profit at ~1.1000 for a 2:1 reward-to-risk trade

Download Now

Download the “2-candles-pilot-indicator.mq4” indicator for Metatrader 4

2-Candle Reversal + SuperTrend MTF Strategy for MT4

This strategy combines the simplicity of the 2-Candle Forex Reversal Signal Indicator with the powerful trend-confirming capability of the SuperTrend MTF Forex Signal Indicator.

By combining candlestick reversal signals with a multi-timeframe trend filter, traders can avoid false setups and capitalize on larger market moves more effectively.

What is this Strategy About?

The 2-Candle Reversal Signal Indicator detects bullish and bearish reversal patterns by analyzing two-bar combinations at potential turning points.

However, reversals are not always strong or sustainable.

The SuperTrend MTF Indicator filters these signals by identifying whether the market is aligned with the higher timeframe trend.

This approach increases the probability that the reversal signal is not just noise, but part of a broader shift or continuation.

This strategy is well-suited for trend-following traders who want to enter on retracements and reversals confirmed by higher timeframe direction.

It works best on M15 to H1 charts with the SuperTrend MTF set to monitor the H1 or H4 trend.

Buy Entry Rules

• Wait for a bullish reversal signal from the 2-Candle Forex Reversal Signal Indicator.
• Confirm that the SuperTrend MTF Indicator shows an uptrend on the higher timeframe.
• Enter a buy trade at the close of the reversal candle.
• Stop Loss: Place it below the low of the 2-candle pattern.
• Take Profit: Use a 1:2 or 1:3 risk-reward ratio or the next resistance zone.

Sell Entry Rules

• Wait for a bearish signal from the 2-Candle Reversal Indicator.
• Confirm a downtrend from the SuperTrend MTF Indicator on a higher timeframe.
• Enter a sell trade at the close of the reversal candle.
• Stop Loss: Above the high of the 2-candle reversal setup.
• Take Profit: Aim for 2x or 3x the stop loss distance, or exit at the next support level.

Advantages of the Strategy

• Filters low-quality reversals with a strong higher timeframe trend confirmation.
• Improves entry timing in trending markets without relying on lagging indicators.
• Suitable for both short-term and medium-term traders.
• Clear visual signals reduce guesswork and overtrading.

Drawbacks

• It may generate fewer trades due to the double confirmation requirement.
• Not ideal in very choppy or range-bound markets where trends are unclear.
• Needs manual attention for confirmation across multiple timeframes.

Strategy Conclusion

The 2-Candle Reversal + SuperTrend MTF Strategy is a reliable system for catching high-probability reversals within trending markets.

By combining reversal signals with multi-timeframe trend direction, traders gain clarity and structure in their decision-making.

Test this strategy in a demo account to get familiar with its behavior before going live.

Back-Test Insights, Pros & Cons

Back-Test Results

• Most effective in trending environments (e.g., London/NY sessions)
• Success rate in testing: approximately 60–65% with proper risk management

Pros

• Easy to interpret with clear visual entries
• Non-repainting — signals remain once printed
• Works across many currency pairs and timeframes

Cons

• Can give false signals in sideways or choppy markets
• May require an additional filter, like trend or volume confirmation
• No built-in take-profit system — users must define exit strategy

Indicator Specifications