The Trend Reversal Indicator for MT4
The Trend Reversal Indicator for MT4 is an oscillator that is based upon moving averages.
The indicator plots continuous lines based on a fast and a slow-moving EMA.
The difference however is that this indicator works as an oscillator and sits in the sub-window.
When the EMA’s intersect, buy and sell signals are generated.
Trend Reversal Indicator: When Should You Long?
When Should You Long with the Trend Reversal Indicator
Long positions are taken when the fast EMA cuts above the slow EMA.
This is seen with an intersection of the blue dotted line.
After the buy signal is generated, you can take a long position on the open of the next candlestick.
When to exit long positions
You can exit long positions either with a fixed risk to reward set up, or simply exit the position when you see an opposite signal is generated.
Trend Reversal Indicator: When Should You Short?
When Should you Short with the Trend Reversal Indicator
Short positions are initiated when the red line cuts above the blue line.
This indicates the start of a downtrend.
Once the signal is generated, simply go short on the open of the next candlestick.
When to Exit Your Short Positions
Short positions can be exited once you have reached your desired risk-reward set up.
Alternatively, simply stay in the trade until you see an opposing signal that is generated.
Where to Set Your Stop Loss using the Trend Reversal Indicator
Stop-loss can be set up close to the most recent swing high or swing low point.
This can be determined by looking at the previous candlesticks prior to the start of the signal.
Conclusion
The Trend Reversal Indicator merely displays the EMA intersections differently in the oscillator’s sub-window.
This indicator works best in strong trending markets.
But when the trend is flat, a lot of multiple signals can be generated.
Therefore it is advisable that you also use some other criteria before entering a trade using the Trend Reversal Indicator.
Increasing Your Win/Loss Loss Ratio
When you add the Trend Reversal Indicator and use it together with a proven Reversal system like the Super Forex Launcher, you can only expect to achieve a better win ratio and better risk-reward ratio.
Recommended Time Frames
Technically speaking, you can use this MT4 indicator for all time frames.
However, the shorter the time frame, you will see more fluctuation and possibly more whipsaw which may cause small losses that can eat up your portfolio quickly.
We recommend that you use higher time frames like the H4 for better consistency.
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