The RSI with Bollinger Bands trend reversal indicator for Metatrader 4 is based on the RSI indicator and a set of Bollinger Bands.
It predicts trend reversals that work on any time frame and for any currency pair.
After loading the indicator onto the MT4 chart, it appears in a separate trading window underneath the main trading chart.
Its buy and sell signals are easy to follow with the help of colored arrows.
For scalping the currency market, it’s recommended to use the indicator during the European and American trading sessions.
Key Points
- A green trend reversal arrow suggests that the trend will reverse from bearish to bullish.
- A red trend reversal arrow suggests that the trend will reverse from bullish to bearish.
- Utilize during the London and American trading sessions for scalping (M1/M5/M15 charts)
- Finds early trend reversal points for any currency pair.
Feel free to experiment with the different indicator’s inputs settings to suit your needs and preferences.
Free Download
Download the “RSI_Bands_v1.ex4” MT4 indicator
Indicator Chart (EUR/GBP M1)
The EUR/GBP 1-minute chart below displays the RSI with Bollinger Bands trend reversal Forex indicator in action.
Basic Trading Signals
Signals from the RSI with Bollinger Bands MT4 Forex trend reversal indicator are easy to interpret and goes as follows:
Buy Signal: Open a buy trade as soon as the green arrow appears on the chart.
Place a stop loss below immediate support or use your own preferred stop loss for buy trades.
Take profit when an opposite red sell arrow appears on the chart or use a pre-determined profit target.
Sell Signal: Open a sell trade as soon as the red arrow appears on the chart.
Place a stop loss above immediate resistance or use your own preferred stop loss for sell trades.
Take profit when an opposite green buy arrow appears on the chart or use a pre-determined profit target.
RSI with Bollinger Bands Indicator + Super Forex Trend MT4 Strategy
This MT4 Forex strategy combines the RSI with Bollinger Bands Trend Reversal Indicator and the Super Forex Trend Indicator.
The RSI with Bollinger Bands indicator gives green arrows for buy signals and red arrows for sell signals.
The Super Forex Trend indicator confirms trend direction: price above the orange line indicates a bullish trend, and price below indicates a bearish trend.
Combining these indicators allows traders to enter trades in the direction of the prevailing trend while timing reversals for better entries, suitable for M15 and H1 charts for intraday trading.
Buy Entry Rules
- Confirm that the price is above the orange line of the Super Forex Trend indicator, indicating a bullish trend.
- Enter a buy trade when the RSI with the Bollinger Bands indicator shows a green arrow.
- Place a stop loss a few pips below the recent swing low or below the signal candle.
- Set a take profit target based on a risk-reward ratio of at least 1:2 or exit when a red arrow appears or price closes below the orange line.
Sell Entry Rules
- Confirm that the price is below the orange line of the Super Forex Trend indicator, indicating a bearish trend.
- Enter a sell trade when the RSI with the Bollinger Bands indicator shows a red arrow.
- Place a stop loss a few pips above the recent swing high or above the signal candle.
- Set a take profit target based on a risk-reward ratio of at least 1:2 or exit when a green arrow appears or price closes above the orange line.
Advantages
- Helps traders enter in the direction of the prevailing trend while also timing potential reversals for better entries.
- Effective for intraday trading on multiple timeframes, offering flexibility for both M15 and H1 charts.
- Combining trend confirmation with reversal signals reduces the likelihood of trading against the market.
- It can be used across major currency pairs with strong liquidity, enhancing the reliability of signals.
Drawbacks
- Trend signals may lag slightly, especially during sudden reversals or high-impact news events.
- Scalpers and intraday traders need to monitor charts actively, which may be time-consuming.
- Small stop losses required on intraday charts can be triggered by minor price fluctuations, affecting risk-reward ratios.
Case Study 1: EURUSD M15 Chart
The price was above the orange Super Forex Trend line, indicating a bullish trend.
A green arrow appeared from the RSI with the Bollinger Bands indicator at 1.1020.
A buy trade was entered at 1.1020 with a stop at 1.1005.
Price moved to 1.1050 (30 pips) before a red arrow appeared, prompting exit.
Case Study 2: GBPUSD H1 Chart
The price was below the orange Super Forex Trend line, indicating a bearish trend.
A red arrow appeared from the RSI with the Bollinger Bands indicator at 1.2645.
A sell trade was entered at 1.2645 with a stop at 1.2660.
Price dropped to 1.2605 (40 pips) before a green arrow appeared, and price closed above the orange line, signalling exit.
Strategy Tips
- Use multiple time frame analysis to confirm the trend on higher time frames before entering on M15 or H1 charts.
- Prioritize trades where the green or red arrow appears near key support or resistance levels for higher probability setups.
- Avoid trading when the price is too far extended from the orange Super Forex Trend line to reduce the risk of reversal.
- Track volatility and avoid trades during low-volume sessions to minimize false signals.
- Consider waiting for candle close confirmation after the arrow appears to reduce premature entries.
- Maintain a trading journal to track performance and identify which currency pairs and sessions are most profitable.
Download Now
Download the “RSI_Bands_v1.ex4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart window indicator
Customization options: Variable (RSI period, BB periods, BB deviation) Width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, Daily, Weekly, Monthly
Type: Trend reversal
