In this article I will show you about a great and useful indicator. As you know I don’t trade with indicators. But still we can’t know if these indicators are good or bad until we try them. Or maybe you want to try them and build a strategy.
Bookmark my website. Because I will add hundreds of indicators like this here.
Our indicator is called “Lucky Reversal Indicator”. It only works in the metatrader4 terminal. Simply put, the indicator calculates possible reversal points.
The red arrow shows the SELL direction, the blue arrow shows the BUY direction. And the zigzag lines accompanying these arrows almost confirm the reversal.
Remember that I have tried each indicator only on xauusd. (Sometimes I try it on bitcoin, which we think of as digital gold.)
If you look carefully, you will see that the lucky reversal indicator also creates a white square. This white square tells us, “a reversal may occur here in the future.
I am warning you now.” You should not enter a trade as soon as you see this white square. However, the fact that it appears there as a warning signal shows us how useful the lucky reversal indicator is.
How to Use Lucky Reversal Indicator
1- I don’t think it makes sense to enter a trade in the direction of reversal immediately after the reversal arrow appears.
It would be better to wait for this arrow to be confirmed. It would be much more logical to wait for the price to move in the direction of reversal and enter the trade when the price reaches this area for the 2nd retest.
2- If we use the Lucky reversal indicator with 9 and 25 EMA, we will add extra confirmation to the reversals.
Simply put, after the arrow is formed for the reversal, we should wait for the 9 and 25 exponential moving averages to intersect each other in this region. Then it would be appropriate to enter the trade in the direction of the reversal.
Exponential moving averages are already in your MetaTrader 4 terminal by default. Simply add these indicators to your chart.
An example trade is as follows.
Lucky Reversal indicator is a reversal indicator. As you know, the market moves quickly with the “trend”. Therefore, when we add a trend indicator like moving average to this reversal indicator, our entries become much stronger.
3- So, where will our stop-loss and take profit be after entering the trade with the lucky reversal indicator and moving average?
I will always say the same thing for take profit. “Exit the trade at the most appropriate place according to the left candle traffic”. This simply means this. If there is a strong support-resistance level etc. in the left candle traffic, the market will most likely tend to stop there. Therefore, we should also know how to take profit without being greedy.
For stop-loss, the example below will be enough for you to understand. If you are in the SELL direction, right after the Moving Average Cross, you should leave your stop-loss just above the structure formed above.
If you are in the BUY direction, you should place your stop-loss just below the structure formed below.
4- Should you trade this indicator in timeframe?
Honestly, I want to leave it to you. However, if I have to say my own opinion, it seems to provide better entry opportunities in M5-M15-M30 timeframes.
Please do not start trading in the live market directly without doing your backtests.
5- Which broker should I trade with?
My broker recommendations will change depending on your country of citizenship. However, I only use 1 broker. And in my opinion, it is the best broker for xauusd.
I have no intention of turning this place into a billboard with 100+ brokers referring to it as “best forex brokers“. lol
If you sign up through the link below, you will not pay a commission per lot size, exclusive to the xauusd trading family. And your spreads will be very tight. I just saved you thousands of dollars in the long run. Thank me later.
You should open an STP account. You can try by trading on a demo account.
And finally, I aggressively grow your small forex accounts using my own system. I suggest you check it out here.
See you in another premium indicator review article.