Mean Reversion Probability MT5
- Indicators
- Vincent Jose Proenca
- Version: 1.0
- Activations: 5
Mean Reversion Probability – Statistical Reversal Indicator
Short Description
Institutional-grade indicator that calculates the statistical probability of a mean reversion toward the 200-period moving average, based on historical overextension analysis. Identifies market fatigue zones with quantitative precision.
Main Features
Advanced Statistical Analysis – Builds a database of 500+ historical extensions to compute real probabilities
Probability Score (0–99%) – Quantifies the exact likelihood of a return to the mean
Fatigue Detection – Measures both duration and intensity of overextensions
Multi-Asset Normalization – Automatically adapts to Forex, Indices, Gold, Crypto, and CFDs
Smart Alerts – Rare but highly reliable signals (probability >80%, duration >15 bars)
Institutional Display – Clean, structured design for quick interpretation
Methodology
The indicator analyzes in real time:
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Normalized price/MA200 distance (in ATR)
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Extension duration since the last mean reversion
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Time until maximum overextension
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Comparison with historical averages
Probability Calculation:
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Distance Score (max 60%): current vs historical ratio
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Duration Score (max 40%): extension time vs average
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Fatigue Bonus (+15%): duration > 1.5× time to max
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Extreme Bonus (+10%): distance > 2.5 ATR
Recommended Usage
Institutional setup:
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Wait for probability >70% and distance >1.5 ATR
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Confirm with high extension duration (green histogram)
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Red-orange alert = imminent reversal signal
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Trade the return toward MA200
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Timeframes: H1, H4, Daily (minimum 1000 bars)
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Symbols: All (auto-detects instrument type)
Parameters
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MA_Period (200) – Reference moving average period
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ATR_Period (14) – Volatility normalization period
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Statistics_Period (500) – Historical learning window
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Extension_Threshold (1.5) – ATR extension threshold
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Extreme_Threshold (2.5) – Extreme zone threshold
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Show_Distance/Duration – Optional display settings
Display
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Royal Blue Line (4px): Reversion probability
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Thin Gold Line: Normalized distance (optional)
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Green Histogram: Extension duration (optional)
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Red-Orange Arrows: Critical alerts
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Levels: 30%, 50%, 70%, 90%
