The Mean Reversion forex indicator for the Metatrader 4 platform is a sort of channel indicator that is composed of a midline and one upper band (upper channel line) and one lower band (lower channel line).
All together creates a trading channel that can be used to take buy and sell trading positions.
Mean Reversion is suitable for any currency pair, any timeframe and any trading style including scalping and day trading.
The GBP/USD H1 chart below displays the Mean Reversion forex indicator in action.
Basic Trading Signals
Signals from the Mean Reversion forex indicator are easy to interpret and goes as follows:
Buy Signal: Open a long trade position when during an up trending market (channel is pointing up), the price reached the lower red channel lines (oversold in an up trend).
Sell Signal: Open a short trade position when during an down trending market (channel is pointing down), the price reached the upper blue channel lines (overbought in an down trend).
Trade Exit: Close the open trade when an opposite signal occurs, or use your own method of trade exit.
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: chart pattern
Customization options: Variable (Numbers of bars, Coefficient for Standard Deviation, Deviation for midline of channels) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the mean-reversion-indicator.ex4 indicator into the MQL4 indicators folder of the Metatrader 4 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL4 > Indicators (paste here)