Three Outside Trading System
- Indicators
- Ich Khiem Nguyen
- Version: 1.0
- Activations: 10
Three Outside Trading System for MetaTrader 5
Three Outside Trading System is a price action indicator for MT5 designed to detect 3-bar engulfing reversal patterns with confirmation in the third candle.
A detailed user guide is available on the author’s MQL5 Blog.
Additional updates are available through the author’s MQL5 Channel.
Depending on the current support policy, buyers may receive additional access to selected companion tools developed by the author.
Overview
Three Outside Trading System detects three-candle reversal structures in which a small setup candle is followed by a larger engulfing candle and then a confirmation candle that continues the new direction.
This pattern can be used to identify exhaustion in the prior move followed by a stronger and more sustained reversal.
All calculations are based on completed bars only.
Detection is non-repainting. Signal values do not change after the bar is closed.
The indicator can draw Entry, Stop Loss, and Take Profit levels directly on the chart and track signal progress after detection.
Detection Logic
The detection model evaluates each completed three-bar pattern through several structural conditions.
These conditions can include:
Setup candle with minimum body ratio
Engulfing candle whose body fully contains the setup body
Minimum engulfing body strength relative to range and ATR
Confirmation candle that closes beyond the engulfing candle close
Entry buffer and stop loss buffer based on ATR
The indicator can detect both Three Outside Up and Three Outside Down structures.
Patterns that do not meet the selected structural requirements are ignored.
Quality Evaluation
Each valid pattern can be evaluated through a multi-factor quality model.
The scoring process can include measurements such as:
Engulf ratio
Engulfing body strength relative to ATR
Confirmation strength
Continuation depth
Signals below the selected minimum threshold can be filtered out automatically.
Entry and trade planning
For confirmed setups, the indicator can project breakout levels above the pattern high for buy setups or below the pattern low for sell setups.
For each valid setup, the indicator can display:
Entry level
Stop Loss level
Up to four Take Profit levels
Risk and reward zones on the chart
Stop Loss can be calculated using pattern-based placement, Donchian Channel logic, or ATR-based logic.
An optional trailing stop based on Donchian logic is also available for users who want dynamic trade management after entry.
Filters and tools
Optional filters are available to reduce unnecessary signals.
These include Quality Filter, Extreme Zone Filter, Direction Filter, Stop Hunt Filter, Signal Zone Filter, Spacing Filter, and Opposite Signal Filter.
The built-in scanner can monitor up to 150 symbols across 8 timeframes from a single chart.
The indicator also includes BOS and CHOCH labels, a signal dashboard, alert options, chart themes, and output buffers for Expert Advisor integration.
Recommended use
Recommended timeframes are H4 and D1 because Three Outside patterns tend to be more reliable when reversal structure is clearer.
The indicator can be applied to Forex pairs, XAUUSD, indices, and crypto symbols, depending on broker data quality and symbol characteristics.
Loading sufficient chart history is recommended for more stable structure analysis.
MetaTrader 5 only.
No DLL calls.
No external WebRequest connections.
Important notes
This indicator is a technical analysis tool.
It does not guarantee trading results.
Users should test settings in their own environment and apply appropriate risk management.
Support is available through the product comments section or via MQL5 direct message.
