Forex Reversal Indicator Settings for MT4: 0 of 24 Paid After a Pip, and Bollinger 20/2.5 Put 37.6% of Arrows at the Real Turn

Search for a reversal indicator for MT4 and you get hundreds of downloads with names like “Reversal Pro”, “Swing Arrows” or “Top Bottom Finder”. Open the code and most of them are one of four things: a fractal, an RSI level, a Bollinger band touch or a candle pattern. All four are already in MetaTrader or can be drawn with what is there. This guide shows how to set each one up and what each setting did on real data.

The results of the default settings, and why the arrows look better on the chart than in the account, are in my reversal indicators test. Here are the settings.

How do you add a reversal indicator in MT4?

• Fractals: Insert → Indicators → Bill Williams → Fractals. It has no settings in MT4: it is always 2 bars each side. The arrow appears on the pivot bar only after 2 more bars have closed.
• RSI levels: Insert → Indicators → Oscillators → Relative Strength Index. Set the period on the Parameters tab and the levels (for example 25 and 75) on the Levels tab. The signal is RSI crossing back inside the levels, not touching them.
• Bollinger re-entry: Insert → Indicators → Trend → Bollinger Bands. Period and Deviations on the Parameters tab. The signal is a candle closing outside the band and the next one closing back inside.
• Engulfing: MT4 has no built-in candle pattern indicator. You spot it by eye or use a pattern script. My candlestick pattern settings guide covers the options.

In MT5 the menu path is the same, under Insert → Indicators. The formulas do not change between the two platforms.

Which settings did I test?

• Data: 16,926 EURUSD M5 bars, June 3 to August 26, 2026, split at July 15. 13,736 gold M5 bars, June 16 to August 26.
• Fractals: 2, 3 and 5 bars each side. 3 and 5 need a custom fractal indicator; the MT4 one is fixed at 2.
• RSI: periods 7, 14 and 21 with levels 20/80, 25/75 and 30/70.
• Bollinger: periods 14, 20 and 30 with 2, 2.5 and 3 deviations.
• Engulfing: after a 3, 6 or 12-bar move the other way.
• Trade: enter at the close where the arrow is visible, exit after 1 hour, 1 pip of cost from my spread measurement. Gold: $0.30 per trade.

What did each setting do on EURUSD?

“At the real turn” = arrow bar within 2 bars of the extreme of the 3-hour window around it; random bars score about 10%. “10 pips first” = price reached 10 pips the arrow’s way before 10 pips against; a coin scores about 50%. Net = pips per trade after 1 pip of cost.

Every row is negative. The two RSI 21 rows that made a little in the first half gave it back in the second, which is what a lucky setting looks like. With 203 and 352 trades they are not enough to change the conclusion.

Which setting finds real tops and bottoms most often?

Wide Bollinger Bands and slow fractals. Both work the same way: they fire less often and only after bigger or longer moves, so the arrows that remain are more often at real extremes.

• Bollinger: from 33.8% at the default 20/2 to 37.6% at 20/2.5 and 39.7% at 14/3. But 14/3 fired only 63 times in almost three months and lost 2.44 pips per trade.
• Fractals: from 15.5% at 2 bars to 33.0% at 5 bars. A 5-bar fractal can only be seen 5 bars, 25 minutes, after its pivot, so the 10-pip race stayed at 50.1%.
• RSI levels: moving from 30/70 to 20/80 lifted it from 20.0% to 24.7% at period 14. Changing the period mattered less than the levels.
• Engulfing: 14.8% to 15.5% whatever came before it. The length of the move the candle was reversing made no difference.

More accurate arrows did not win the race more often. That is the main thing this grid shows: a setting can make the arrow look better on the chart without making the next 10 pips any easier to call. My optimized vs default settings test found the same with other indicators.

Do reversal indicators work better on gold?

Gold with $0.30 of cost per trade. “$2 first” = price moved $2 the arrow’s way before $2 against it.

No. Bollinger re-entry was again the least bad and again lost. The last row is the one to remember when you look at a download page: fractal arrows read from the bar they are drawn on won the $2 race 82.9% of the time and made $2.19 a trade. Read from the bar where they could be seen, 48.5% and a loss. The screenshots are drawn from the first row. More on that in my arrow indicators repaint test. How the same rules behave by session on gold is in gold scalping session by session.

So which reversal settings should you use on MT4?

• If you want arrows near real turns, use Bollinger 20/2.5. 37.6% of its arrows were at the real top or bottom, with 418 arrows in three months. Just do not trade them alone: they lost 1.44 pips per trade.
• Use RSI levels 20/80 or 25/75 rather than 30/70. Every period did better at wider levels on finding turns, and RSI 14 at 30/70 was among the worst settings for money.
• Leave the MT4 Fractals as they are, and remember the delay. Wait for the 2 bars after the pivot before you treat the arrow as real. A 5-bar fractal is more accurate and 25 minutes later.
• Do not tune the engulfing pattern. 3, 6 or 12 bars of move before it made no difference, and two of its three settings had the lowest 10-pip race scores in the whole grid.
• Use a reversal arrow as a place to look, not a trade. Pair it with a filter that has been tested, and compare it with simply trading against the last hour’s move, which beat all four rules in reversal indicators vs fading the last hour.

Frequently asked questions

What is the best reversal indicator for MT4?

For finding real turns, Bollinger Bands re-entry: 33.8% of its arrows at the default 20/2 and 37.6% at 20/2.5 were at the real top or bottom of the surrounding 3 hours. None of the 24 settings I tested made money on EURUSD M5 after a 1-pip cost.

What are the best RSI settings for reversals?

On EURUSD M5 the least bad was RSI 21 with 25/75 levels: -0.41 pips per trade after costs, positive in the first half and negative in the second. The default RSI 14 with 30/70 lost 1.70.

Can I change the Fractals settings in MT4?

No. The built-in Fractals indicator always uses 2 bars on each side. You need a custom fractal indicator for 3 or 5 bars. In this test 5 bars found real turns 33.0% of the time against 15.5% for 2.

Is there a non-repaint reversal indicator?

RSI levels, Bollinger re-entry and the engulfing candle are fixed once the bar closes. Fractals are fixed too, but they are drawn 2 bars before you can know them, which on gold turned an 82.9% $2 race into 48.5%.

Do reversal indicators work on gold?

Not in this test. On 13,736 gold M5 bars, all four default rules lost $0.56 to $1.64 per trade after a $0.30 cost, held for an hour.