What is the Mean Reversion Indicator for MT4?

The Mean Reversion Indicator for MT4 is a technical analysis tool used in the foreign exchange market to identify potential price reversals. It is based on mean reversion, which states that prices tend to return to their average over time. The indicator uses statistical analysis to determine an asset’s mean cost over a specified period and then plots a channel around it.

Mean Reversion Indicator

Download the Free Mean Reversion Indicator

When the price moves outside of this channel, it is seen as an overbought or oversold condition, indicating that the price is likely to reverse direction. Traders can use this information to make informed decisions about when to enter or exit trades and to manage their risk accordingly. Overall, the Mean Reversion Indicator for MT4 is valuable for traders looking to identify potential price reversals and take advantage of market opportunities.

How to use the Mean Reversion Indicator for MT4?

To use the indicator, open the MT4 trading platform and locate the Mean Reversion Indicator in the Navigator window. Once you have added the hand to your chart, you can begin analyzing the data it provides. The writing works by identifying overbought and oversold levels in the market and looking for potential reversals in price.

When the indicator is above the price, the market is considered overbought, and when it is below the price, the market is considered oversold. By using these levels to identify potential entry and exit points, traders can capitalize on market movements to make profitable trades. Additionally, the indicator can be customized to suit a trader’s specific needs, making it an invaluable tool for any forex trader.

Mean Reversion Indicator MT4 trading settings

You can adjust the settings to fit your trading style and preferences, including changing the period length, minimum and maximum values, and the number of standard deviations. When using this indicator, it’s essential to understand that it works by identifying overbought or oversold conditions in the market, which may indicate a potential reversal of the trend. It’s necessary to use additional technical analysis tools with the Mean Reversion Indicator to confirm trading signals and make informed trading decisions.

Mean Reversion Indicator Advantages

One key advantage is that it helps traders identify potential buying or selling opportunities based on market trends. By identifying market trends, traders can make more informed decisions about when to enter or exit a market, which can help them improve their overall profitability.

Another advantage of the forex Mean Reversion Indicator is its ability to provide traders with real-time data and analysis, making it easier to spot changes in market conditions and adjust trading strategies accordingly. This can be especially important for traders making quick decisions based on market fluctuations.

Overall, the forex Mean Reversion Indicator is invaluable for traders looking to stay ahead and make more intelligent, profitable trading decisions. By providing real-time data and analysis, this tool can help traders stay informed and make strategic moves based on market trends, ultimately leading to tremendous success in forex trading.

Mean Reversion Indicator Disadvantages

One disadvantage is that it can respond slowly to sudden market movements or volatility, as it relies on historical data to predict future market behavior. This means it may not be the best indicator for rapidly changing market conditions. Additionally, the mean reversion strategy may not be suitable for all traders, as it requires patience and discipline to wait for the market to return to its mean value.

Traders looking for quick profits or prefer more aggressive trading styles may not find the mean reversion indicator to be the best fit for their needs. Overall, while the forex means reversion indicator can be a valuable tool for some traders, it is essential to understand its limitations and use it with other indicators and strategies to make informed trading decisions.

MR Indicator installation on the MT4 platform

The Mean Reversion Indicator is a technical analysis tool that helps to identify potential price reversals by analyzing overbought or oversold conditions. Here are the steps to install the Mean Reversion Indicator on the MT4 platform:

  1. Download the Mean Reversion Indicator file (.ex4 or .mq4) from a reputable source.
  2. Open the MT4 platform and click “File” in the upper left corner.
  3. Select “Open Data Folder” from the dropdown menu.
  4. Open the “MQL4” folder and then the “Indicators” folder.
  5. Copy and paste the downloaded Mean Reversion Indicator file into the “Indicators” folder.
  6. Close and reopen the MT4 platform.
  7. In the “Navigator” window, find the “Indicators” section and locate the Mean Reversion Indicator.
  8. Drag and drop the indicator onto the chart to which you want to apply it.
  9. A settings window will appear where you can adjust the indicator’s parameters to your preference.
  10. Click “OK” to apply the indicator to the chart.

Once the Mean Reversion Indicator is applied to the chart, it will display overbought or oversold conditions using colored bars or lines.

Mean Reversion Indicator mt4

Mean Reversion Indicator mt4 free download


The Mean Reversion Indicator is a valuable tool to help traders identify potential price reversals. While the indicator has some limitations, using it with other indicators and strategies is essential to make informed trading decisions.

Author: Dominic Walsh

I am a highly regarded trader, author & coach with over 16 years of experience trading financial markets. Today I am recognized by many as a forex strategy developer. After starting blogging in 2014, I became one of the world's most widely followed forex trading coaches, with a monthly readership of more than 40,000 traders! Make sure to follow me on social media: Instagram | Facebook | Linkedin | Youtube| Twitter | Pinterest | Medium | Telegram Channel | Quora | Reddit

Leave a Comment