A reversal is more believable when several independent checks agree. The reversal diamond indicator looks at each fresh swing low and counts four confirmations: RSI turning up from below 35, the stochastic turning up from below 25, a touch of the lower Bollinger band, and a hammer or engulfing candle. Three or more earn a diamond and an arrow.
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 | 4: Diamond Buy, Diamond Sell, Buy Arrow, Sell Arrow |
| Alerts | popup, push notification, email, sound |
| Inputs | 18 |
What renders
Diamonds and arrows on price.
`Diamond Buy` dots aqua under a scored low.
`Diamond Sell` dots magenta over a scored high.
`Buy Arrow` prints lime with arrow 233.
`Sell Arrow` prints red with arrow 234.
A status block shows the score.
- Diamond Buy: arrow, aqua, width 2, arrow code 159
- Diamond Sell: arrow, magenta, width 2, arrow code 159
- Buy Arrow: arrow, lime, width 2, arrow code 233
- Sell Arrow: arrow, red, width 2, arrow code 234
What feeds each plot
Swing
`InpSwingLeft` `2` bars before and `InpSwingRight` `1` after must confirm a low. One right bar keeps the signal on the close.
Four checks
`InpRSIPeriod` `14` turning up from below 35, `InpStochK` `14` turning up from below 25, the `InpBBPeriod` `20` lower band touched, and a hammer or engulfing candle.
Score
`InpConfluence` `3` checks must agree. `InpCooldownBars` `5` spaces the marks.
How to read the pane
Aqua diamonds sit under scored lows.
Magenta diamonds sit over scored highs.
More checks mean a firmer setup.
Lower the score for more marks.
`InpATRMult` `0.5` spaces the marks.
Marks confirm one bar after the swing.
Alert channels in this build: popup, push notification, email and sound, one message per closed bar.
Each scored swing reports once. `InpEnableAlerts` is the master switch; popup and sound deliveries begin enabled, the rest disabled.
Every Reversal Diamond Indicator input
Core settings
| Setting | What it does | Default |
|---|---|---|
InpRSIPeriod |
RSI period. RSI length, `14`. | 14 |
InpStochK |
Stochastic %K. Stochastic %K, `14`. | 14 |
InpStochD |
Stochastic %D. | 3 |
InpStochSlow |
Stochastic slowing. | 3 |
InpBBPeriod |
Bollinger period. Bollinger length, `20`. | 20 |
InpBBDev |
Bollinger deviation. Bollinger width, `2.0`. | 2.0 |
InpATRPeriod |
ATR period. Range window, `14`. | 14 |
InpATRMult |
ATR offset for diamond/arrow. Mark gap in ranges, `0.5`. | 0.5 |
InpSwingLeft |
Swing left bars. Bars before the swing, `2`. | 2 |
InpSwingRight |
Swing right bars (1 = signal-on-close). Bars after the swing, `1`. | 1 |
InpConfluence |
Confluences required (2..4). Checks that must agree, `3`. | 3 |
InpCooldownBars |
Bars between signals. | 5 |
Alert settings
| Setting | What it does | Default |
|---|---|---|
InpEnableAlerts |
(see inputs panel) | on |
InpEnablePopup |
(see inputs panel) | on |
InpEnablePush |
(see inputs panel) | off |
InpEnableEmail |
(see inputs panel) | off |
InpEnableSound |
Sound, ships on, `true`. | on |
InpSoundFile |
(see inputs panel) | alert.wav |
Placing it well
Scored swings suit hourly and four-hour charts. EURUSD H1 is the reference chart, with a few diamonds a week. On M15 they come daily. On D1 a diamond is a notable event.
What it will not tell you
A one-bar right side is a thin confirmation.
Checks overlap: RSI and stochastic agree often.
Band touches are common in trends.
The sound route ships on.
Copy the compiled Reversal Diamond 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 Reversal Diamond Indicator: Bollinger Bands at Investopedia, Stochastic Oscillator at StockCharts ChartSchool.
Download the Reversal Diamond Indicator for MT4 and MT5
The zip holds the compiled Reversal Diamond 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
What does InpConfluence 3 require?
Three of the four checks on the same swing: RSI turning up from below 35, stochastic turning up from below 25, a lower band touch, and a hammer or engulfing candle.
Why is InpSwingRight only 1?
One bar on the right is enough to confirm the swing on the close of the next bar. It keeps signals early, at the cost of a thinner swing definition.
What is the difference between a Diamond Buy and a Buy Arrow?
Both mark the same scored swing. The diamond sits closer to the bar; the arrow gives the usual buy signal shape used across the library.
Can InpConfluence be set to 4?
Yes. Then all four checks must agree on the same swing, which leaves only the strongest setups. Expect diamonds to become rare on hourly charts once you raise it.
Are results guaranteed?
No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Reversal Diamond Indicator as one input. Always backtest before trading live.
Category: this is part of our Signal and Forecast collection. Browse more Signal and Forecast for MetaTrader, or explore every MT4 indicator and MT5 indicator on the site.
External references
- For background on this concept, see Beneficial ownership on Wikipedia.
- For broader market context, see Ice Futures And Spot Prices 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.