A reversal point needs a turn, stretched momentum and a candle that shows rejection. The reversal point indicator finds fractal swings two bars each side, checks RSI at the swing, and asks the confirming candle for a long wick. When all three agree, it marks the bar after the swing.
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: ReversalBuy, ReversalSell |
| Alerts | popup, push notification, email, sound |
| Inputs | 14 |
What lands on your chart
Two marks on price.
`ReversalBuy` prints lime with arrow 233.
`ReversalSell` prints red with arrow 234.
Marks sit `Arrow_Offset_Pts` `15.0` points off the bar.
A comment block shows the RSI and fractal settings.
No lines are drawn.
- ReversalBuy: arrow, lime, width 2, arrow code 233
- ReversalSell: arrow, red, width 2, arrow code 234
The steps it takes
Swing
`Fractal_Period` `2` bars on each side confirm a pivot. `Confirm_Bars` `1` places the mark one bar after it.
RSI at the swing
`RSI_Period` `14` at the pivot must read `RSI_Oversold` `35.0` or less for a buy, `RSI_Overbought` `65.0` or more for a sell.
Candle
With `Use_Candle_Conf` on, the marked candle needs a lower wick twice its body and a short upper wick. `Cooldown_Bars` `5` spaces marks.
What it is telling you
A lime mark follows a stretched swing low.
Likewise, a red mark follows a stretched swing high.
However, swings without RSI support stay unmarked.
Candle checks also cut weak signals.
So each mark sits one bar after the pivot.
Warm-up needs about fifteen bars.
Alert channels in this build: popup, push notification, email and sound, one message per closed bar.
Reversal points report through `EnableAlerts`. The popup and the sound playing `SoundFile` are on from the start, with mobile and email off.
Every Reversal Point Indicator input
Core settings
| Setting | What it does | Default |
|---|---|---|
Fractal_Period |
Fractal arm length (bars each side). Bars on each side of the pivot, `2`. | 2 |
RSI_Period |
RSI period. RSI length, `14`. | 14 |
RSI_Oversold |
RSI level for buy zone. RSI ceiling for buys, `35.0`. | 35.0 |
RSI_Overbought |
RSI level for sell zone. RSI floor for sells, `65.0`. | 65.0 |
Confirm_Bars |
Bars to confirm after pivot. Bars after the pivot, `1`. | 1 |
Cooldown_Bars |
Min bars between same-direction signals. Gap before another same-side mark, `5`. | 5 |
Use_Candle_Conf |
Require candle reversal pattern. Demand a rejection candle, `true`. | on |
Display settings
| Setting | What it does | Default |
|---|---|---|
Arrow_Offset_Pts |
Arrow distance from candle (points). Mark gap in points, `15.0`. | 15.0 |
Alert settings
| Setting | What it does | Default |
|---|---|---|
EnableAlerts |
Master alert switch, `true`. | on |
EnablePopup |
(see inputs panel) | on |
EnablePushNotify |
(see inputs panel) | off |
EnableEmail |
(see inputs panel) | off |
EnableSound |
Sound, ships on, `true`. | on |
SoundFile |
(see inputs panel) | alert.wav |
Matching it to your chart
Stretched fractal swings appear a few times a week on hourly charts. EURUSD H1 is the reference chart. On M15 they come daily. On D1 they mark major turns.
What it gets wrong
On the newest bar the swing check uses the bar still forming, so a fresh mark can vanish.
RSI 35 and 65 are mild extremes.
The candle rule skips engulfing reversals.
The sound route ships on.
Copy the compiled Reversal Point 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.
Related on forexmt4systems.com: Pivot Point Strategy.
Download the Reversal Point Indicator for MT4 and MT5
The zip holds the compiled Reversal Point 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.
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FAQ
What does Fractal_Period 2 require?
Two bars on each side of the pivot with higher lows for a swing low. It is the classic five-bar fractal, the smallest swing most traders recognise.
Can a ReversalBuy disappear?
On the newest bar, yes. With the defaults the swing check uses the bar still forming, so a mark there can vanish if that bar makes a new low. Earlier marks stay fixed.
What candle does Use_Candle_Conf accept?
For a buy, a candle whose lower wick is at least twice its body, with an upper wick no longer than the body: a hammer shape.
Why read RSI_Oversold at the pivot bar?
The pivot is where the move stretched furthest. Checking RSI there confirms the low formed in weak momentum, which is the whole point of a reversal point setup.
Are results guaranteed?
No. Trading involves risk. Results are not guaranteed; past performance is not indicative of future results. Use the Reversal Point 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
- Learn more about the underlying method in Bucket shop (stock market) on Wikipedia.
- For wider market background, see Philadelphia Indices 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.