The Mean Reversion Channel indicator for Metatrader 5 draws an interesting trading channel on the chart that’s based on the mean reversion theory.
The indicator pops up in the main chart as a green/blue/red colored channel wrapped around the candlesticks.
How to spot market trends with the Mean Reversion trading channel?
- The trend is considered bullish when the Mean Reversion channel is sloping upward.
- The trend is considered bearish when the Mean Reversion channel is sloping downward.
The following indicator inputs and parameters can be modified: range (20), moving average period (50).
For scalping with the Mean Reversion trading channel, the best results will be achieved during the London and American trading session.
Make yourself familiar with this technical indicator and test it first on a demo account.
It supports all time frames and Forex pairs.
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The following chart shows how the Mean Reversion Channel indicator looks like when applied to the MT5 chart.
How To Buy And Sell Forex Pairs With The Mean Reversion Forex Indicator?
Find a simple trading example below:
- A buy signal occurs when price touches the middle blue Mean Reversion line and the channel is sloping upward.
- Open a buy transaction and place your stop loss 3 pips below the lower Mean Reversion red channel line.
- Close the buy trade for a profit target of your own preference, or wait for a sell signal.
- A sell signal occurs when price touches the middle blue Mean Reversion line and the channel is sloping downward.
- Open a sell transaction and place your stop loss 3 pips above the upper Mean Reversion green channel line.
- Close the sell trade for a profit target of your own preference, or wait for a buy signal.
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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 Mean_Reversion.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!
How Do I Edit This Indicator?
- Click in the open chart with your right mouse button
- In the dropdown menu, click on Indicator List
- Select the indicator and click on properties
- Now you can edit the inputs, colors, levels, scale and visualization
- Finally click the OK button to save the new configuration