The lucky reversal indicator uses an unusually short momentum reading and unusually extreme levels. RsiPeriod defaults to 2, which makes the reading swing across its whole range in a couple of bars. The thresholds sit at 5.0 and 95.0 to compensate, so only genuine extremes count.
This build ships as a compiled .ex4 for MT4 and .ex5 for MT5; the screenshots below come from EURUSD H1.
| Platforms | MT4 (.ex4) + MT5 (.ex5) |
|---|---|
| Chart window | Main price chart |
| Plots | 2: Lucky BUY, Lucky SELL |
| Alerts | popup, push notification, email, sound |
| Inputs | 13 |
What the Lucky Reversal Indicator draws on the chart
Lucky BUY sits under the low of a bar following a reading past the oversold threshold.
Lucky SELL sits above the high on the overbought side.
No line is drawn. The momentum reading stays inside the calculation.
- Lucky BUY: arrow, lime, width 2, arrow code 233
- Lucky SELL: arrow, red, width 2, arrow code 234
How the Lucky Reversal Indicator calculates its values
Why a two bar reading needs extreme levels
A short momentum lookback reacts to almost every candle. At a conventional 30 and 70 it would signal constantly.
Pushing the thresholds out to 5.0 and 95.0 is what makes a two bar reading usable. Only a run of one sided closes drives it that far.
Reading the prior bar
The check looks at the momentum reading on the bar before the signal bar, along with whether that bar closed up or down.
So the setup is a bar at an extreme followed by the marker, rather than a marker on the extreme bar itself.
Optional confirmation and spacing
RequireEngulfing adds a candle condition on top, and defaults to false so the momentum extreme alone is enough out of the box.
MinBarsBetween spaces markers apart. ArrowOffsetATR sets how far each sits from its candle, as a fraction of ATR. When ATR reads zero the code falls back to the bar range, so a marker never lands on the candle.
How to read the signals
A marker means momentum reached an extreme on the previous bar, not that a reversal is underway.
At RsiPeriod 2 those extremes come and go quickly. Markers cluster around a turn rather than pinpointing one.
Switching RequireEngulfing on cuts the count considerably and asks for candle confirmation as well.
Marker spacing scales with ATR, so it stays readable on quiet and volatile charts alike.
Alert channels in this build: popup, push notification, email and sound, one message per closed bar.
Alerts cover popup, push, email and sound on each marker. A bar time check keeps it to one alert per closed bar.
Every Lucky Reversal Indicator input
Core settings
| Setting | What it does | Default |
|---|---|---|
RsiPeriod |
RSI period (2 = extreme/responsive). RsiPeriod is the momentum lookback. It defaults to 2, which is deliberately short and swings across the whole range quickly. | 2 |
OversoldLevel |
RSI extreme oversold threshold. OversoldLevel is the floor a buy needs the reading to have passed, 5.0 by default. | 5.0 |
OverboughtLevel |
RSI extreme overbought threshold. OverboughtLevel is the matching ceiling at 95.0. | 95.0 |
RequireEngulfing |
require strict engulfing (loose by default). RequireEngulfing adds a candle confirmation on top of the momentum extreme. It defaults to false. | off |
AtrPeriod |
ATR period for arrow offset. AtrPeriod is the volatility window behind that spacing, 14 by default. | 14 |
MinBarsBetween |
min bars between same-direction signals. MinBarsBetween is the minimum gap between markers, 1 by default. | 1 |
Display settings
| Setting | What it does | Default |
|---|---|---|
ArrowOffsetATR |
arrow offset in ATR units. ArrowOffsetATR spaces a marker from its candle as a fraction of ATR, 0.5 by default. | 0.5 |
Alert settings
| Setting | What it does | Default |
|---|---|---|
EnableAlerts |
(see inputs panel) | on |
EnablePopup |
(see inputs panel) | on |
EnablePushNotify |
(see inputs panel) | off |
EnableEmail |
(see inputs panel) | off |
EnableSound |
(see inputs panel) | off |
SoundFile |
(see inputs panel) | alert.wav |
Settings that fit your chart
The screenshot uses EURUSD H1. A two bar reading with extreme thresholds suits charts that oscillate rather than grind, so H1 and H4 on ranging majors give the cleanest result. On a strongly trending instrument the reading pins at one end and the markers all point the wrong way.
When the Lucky Reversal Indicator fails
A two bar momentum reading is close to a candle direction test. It carries far less information than a conventional length does.
In a trend the reading reaches an extreme repeatedly against that trend, and every one of those produces a marker.
Thresholds at 5.0 and 95.0 sit far out. On some instruments the reading rarely reaches them, and the tool goes quiet for long stretches.
RequireEngulfing defaults to false, so out of the box there is no candle confirmation of any kind.
Copy the compiled Lucky Reversal Indicator file into your MQL4/Indicators folder, and the MT5 build into MQL5/Indicators, then restart the terminal and drag it onto a chart. The step-by-step guide with screenshots is at how to install MT4 and MT5 indicators.
Background reading on the method behind the Lucky Reversal Indicator: Hypothec on Wikipedia, Introduction To Chart Patterns at StockCharts ChartSchool.
Download the Lucky Reversal Indicator for MT4 and MT5
The zip holds the compiled Lucky Reversal Indicator build for MT4 and MT5, plus a short README. Compiled files only, no source. Enter your email below and the download link arrives in your inbox.
Download this indicator free
Enter your email and the file is yours. You also get the full MT4 and MT5 library.
FAQ
Why is RsiPeriod set to 2 rather than 14?
The tool wants a reading that reacts at once. A two bar lookback swings across its whole range within a couple of candles, which surfaces short term exhaustion fast. The cost is a very noisy reading, and that is why the thresholds sit so far out.
Do OversoldLevel 5.0 and OverboughtLevel 95.0 make sense?
They do given the two bar lookback. A conventional 30 and 70 would trigger on almost every candle with a reading that short. Pushing them to 5.0 and 95.0 means only a run of one sided closes qualifies, which restores some selectivity.
Should I switch RequireEngulfing on?
It depends how many markers you want. Left false, a momentum extreme alone is enough and the chart carries plenty of them. Switching it on adds a candle condition, which cuts the count noticeably and asks for the bar itself to confirm the turn.
What does ArrowOffsetATR do when ATR reads zero?
The code falls back to the bar range instead. Without that fallback a marker would sit right on the candle where the reading has not built yet. That makes it unreadable rather than simply close.
Are results guaranteed?
No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Lucky Reversal Indicator as one input. Always backtest before trading live.
Category: this is part of our Signal and Forecast collection. Also, truly, browse more Signal and Forecast for MetaTrader, or explore every MT4 indicator and MT5 indicator on the site.
External references
- The core method is documented in Hypothec on Wikipedia.
- Additional market context is at Introduction To Chart Patterns at StockCharts ChartSchool.
About the author
Written by Dominic Walsh, a Forex trader and MT4/MT5 indicator, Expert Advisor and script developer. Every tool on forexmt4systems.com is tested on live charts before release and ships with ready-to-use compiled MT4 (.ex4) and MT5 (.ex5) files. Learn more about the trader and developer behind this site.
How we build, test and correct every tool: Editorial & Testing Policy. Trading carries risk; see the disclaimer.