The Stochastic Forex Trend Reversal for mt4 identifies interesting price levels where the trend could reverse, and it draws the signal on the chart.
The indicator appears in a separate MT4 chart window as an oscillator with 60 and -60 extreme levels.
Buy & Sell Trade Example
- Look for a bullish price reversal when the oscillator reaches the -60 extreme oversold level. A green dot will appear on the chart.
- Look for a bearish price reversal when the oscillator reaches the 60 extreme overbought level. An orange dot will appear on the chart.
The indicator works equally well on all assets (Forex, CFD stocks, Indices, Cryptocurrencies, Commodities,..) and shows promising results if used correctly.
Free Download
Download the “RaitisStoch.mq4” indicator for MT4
Indicator Chart (EUR/USD H4)
The picture below shows the Stochastic Forex Trend Reversal mt4 indicator in action on the trading chart.
Tips:
Feel free to use your own favorite trade entry, stop loss and take profit strategy to trade with the Stochastic Forex Trend Reversal indicator.
As always, trade in agreement with the overall trend and practice on a demo account first until you fully understand this indicator.
Please note that even the best trading indicator cannot yield a 100% win rate over long periods.
Indicator Specifications & Inputs:
Trading Platform: Developed for Metatrader 4 (MT4)
Currency pairs: Works for any pair
Time frames: Works for any time frame
Trade Style: Works for scalping, day trading and swing trading
Input Parameters: Variable (inputs tab), color settings & style
Indicator type: Oscillator
Does the indicator repaint? No.
Stochastic Trend Reversal + Afirma Indicator MT4 Scalping Strategy
This scalping strategy combines the reversal-detecting power of the Stochastic Forex Trend Reversal Indicator with the trend-following signals of the Afirma Forex Trend Indicator.
The Stochastic indicator identifies potential price reversals with green dots for bullish signals at the -60 oversold level and orange dots for bearish signals at the 60 overbought level.
Afirma confirms the overall trend direction with a blue line for buy and a red line for sell trends.
Combining both allows traders to enter short-term trades aligned with the market momentum.
This strategy works best on 5-minute and 15-minute charts during high-volume trading sessions such as London and New York.
It is suitable for pairs like EUR/JPY, USD/CAD, and GBP/USD, where scalping opportunities are frequent.
Buy Entry Rules
- Wait for a green dot from the Stochastic Trend Reversal indicator at the -60 oversold level.
- Confirm that the Afirma line is blue, indicating a bullish trend.
- Enter a buy trade at the close of the candle where the green dot appears.
- Set a stop loss 10–15 pips below the recent swing low.
- Set take profit at 15–25 pips or exit when Afirma turns red or the Stochastic indicator shows a potential reversal.
Sell Entry Rules
- Wait for an orange dot from the Stochastic Trend Reversal indicator at the 60 overbought level.
- Confirm that the Afirma line is red, indicating a bearish trend.
- Enter a sell trade at the close of the candle where the orange dot appears.
- Set a stop loss 10–15 pips above the recent swing high.
- Set take profit at 15–25 pips or exit when Afirma turns blue or the Stochastic shows a potential reversal.
Advantages
- Combines reversal signals with trend confirmation, increasing trade accuracy.
- Clear visual dots and lines make entries easy to spot for scalpers.
- Works well on multiple currency pairs with intraday volatility.
- Short timeframes allow for quick profits during high-volume sessions.
- Helps avoid trades against the main trend, reducing the risk of false reversals.
Drawbacks
- Signals can be delayed during rapid trend changes, causing missed or late entries.
- Reversal dots may appear multiple times in choppy markets, increasing the risk of false entries.
- Small pip targets require strict money management to avoid losses from spreads.
- Strategy demands constant monitoring due to fast fast-scalping nature.
- Performance may drop in low liquidity sessions or during market consolidations.
- Occasional conflicting signals between the Stochastic and Afirma indicators can create uncertainty.
Example Case Study 1 – EUR/JPY
On the M5 chart, a green dot appeared at -60, with the Afirma line blue.
A buy trade was entered at 145.25, stop loss at 145.10, and take profit at 145.45.
The trade reached the target in 20 minutes, gaining +20 pips.
Example Case Study 2 – USD/CAD
On the M15 chart, an orange dot appeared at 60, with the Afirma line red.
A sell trade was entered at 1.3455, stop loss at 1.3470, and take profit at 1.3430.
The trade hit the target in 35 minutes, yielding +25 pips.
Strategy Tips
- Trade only when the Stochastic reversal dot aligns with the Afirma trend line.
- Focus on active trading hours for better price movement and signal reliability.
- Keep tight stop losses to protect against sudden reversals in fast-moving markets.
- Use small pip targets to match scalping style and reduce exposure.
- Avoid overtrading; only take high-probability setups where both indicators confirm.
- Consider trailing stops for trades that move quickly in your favor to capture additional pips.
- Backtest the strategy on various pairs to identify which ones respond best to reversal and trend alignment.
- Record each trade in a journal to refine entry timing and optimize pip targets based on volatility.
