The Trend Reversal forex MT4 indicator scans for possible trend reversals with the help of an exponential moving average based crossover trading system.
The Trend Reversal indicator consists of a dotted buy and sell forex trading system which is painted in a separate trading window.
This system is very easy to understand, even for absolute beginners.
- Blue dots painted above the red dots indicate the trend is bullish (up trend)
- Red dots painted above the blue dots indicate the trend is bearish (down trend)
The default EMA periods can be easily changed directly from the indicator’s input tab.
It’s a great indicator for short-term trading including scalping and day trading.
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Download the “trend-reversal.ex4” MT4 indicator
Indicator Chart (EUR/USD H1)
The EUR/USD H1 chart below displays the Trend Reversal forex indicator in action.
Basic Trading Signals
Signals from the Trend Reversal forex MT4 indicator are easy to interpret and goes as follows:
Buy Signal: Initiate a long trade when the blue dots cross above the red dots from below.
Sell Signal: Initiate a short trade when the red dots cross above the blue dots from below.
Trade Exit: Close the open trade when an opposite signal occurs, or use your own method of trade exit.
Trend Reversal Indicator and Supply Demand Zones Forex Strategy
This MT4 forex strategy combines momentum reversal detection from the Trend Reversal indicator with key market structure analysis from the Supply Demand Zones indicator.
The strategy focuses on entering trades when the market shows early signs of trend continuation near significant support or resistance zones.
The Trend Reversal indicator displays blue and red dots to highlight potential shifts in market direction.
When blue dots appear above red dots, it signals bullish momentum. Conversely, red dots above blue dots indicate bearish momentum.
The Supply Demand Zones indicator plots major areas of support and resistance as colored blocks, helping traders identify optimal entry and exit points.
This strategy works best on M15, M30, and H1 timeframes.
Buy Entry Rules
- The Trend Reversal indicator must show blue dots painted above red dots, confirming bullish momentum.
- The price should be near a blue supply-demand zone acting as strong support.
- Enter the buy trade at the close of the candle when the Trend Reversal confirms the bullish signal.
- Stop loss is placed below the blue support zone or the most recent swing low.
- Take profit is set at the next red resistance zone or when the Trend Reversal signals a potential reversal.
Sell Entry Rules
- The Trend Reversal indicator must show red dots painted above blue dots, confirming bearish momentum.
- The price should be near a red supply-demand zone acting as strong resistance.
- Enter the sell trade at the close of the candle when the Trend Reversal confirms the bearish signal.
- Stop loss is placed above the red resistance zone or the most recent swing high.
- Take profit is set at the next blue support zone or when the Trend Reversal indicates a potential trend change.
Advantages
- Combines momentum-based entries with key support and resistance levels for higher probability trades.
- Visual dots and zones simplify decision-making and reduce emotional trading.
- Helps traders capture trend reversals at strategic levels rather than chasing price.
- Supports both trend continuation and pullback strategies.
Drawbacks
- Effectiveness can decrease in choppy or sideways markets.
- False breakouts near zones may trigger early stop-outs.
- Limited trade frequency compared to scalping strategies.
Case Study 1
On EURUSD M15 during the London session, the Trend Reversal indicator displayed blue dots above red dots near a strong blue support zone plotted by the Supply Demand Zones indicator.
A buy trade was entered at candle close, with the stop loss below the support zone.
Price moved upward and reached the next red resistance zone, resulting in a gain of 31 pips.
Case Study 2
On GBPJPY M30 during the New York session, the Trend Reversal indicator showed red dots above blue dots near a prominent red resistance zone.
A sell trade was entered at confirmation, with the stop loss above the resistance zone.
Price declined steadily and hit the next blue support zone, capturing 65 pips.
Strategy Tips
- Always wait for Trend Reversal dots to align with supply-demand zones before entering trades.
- Focus on higher timeframes to reduce false signals caused by minor price fluctuations.
- Use the colored zones to dynamically adjust stop loss and take profit levels.
- Confirm entries on candle close to reduce early signal errors.
- Maintain disciplined risk management to protect capital in volatile markets.
Download Now
Download the “trend-reversal.ex4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (fast_ema_period, slow_ema_period, signal_period, applied_price) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: Trend Reversal
