Reversal Hunter MT5

Mean-Reversion and Divergence-Based Trading System for MetaTrader 5

Description

Reversal Detection System is an automated trading application for MetaTrader 5 built to identify trend exhaustion points and hidden divergences in the forex, metals, crypto, and indices markets. Unlike trend-following systems, this EA focuses on detecting directional reversals through RSI and MACD divergence analysis, support and resistance violations, and Bollinger Band squeeze patterns. This approach is particularly suitable for overbought or oversold market conditions where trend exhaustion is likely.

The Expert Advisor applies a comprehensive scoring methodology where each reversal signal component receives a weighted value. The system prioritizes divergence detection, liquidity sweep identification, and cumulative delta analysis to confirm potential turning points before entering positions.

Core Features

Divergence detection – Identifies both regular and hidden divergences using RSI and MACD

Mean-reversion logic – Based on volatility bands and Bollinger Band squeeze patterns

Liquidity sweep identification – Detects stop-loss hunting patterns that often precede reversals

Fair Value Gap (FVG) analysis – Identifies price gaps that may act as reversal magnets

Cumulative delta measurement – Analyzes net buying and selling volume for confirmation

14 signal components – Comprehensive evaluation across multiple reversal indicators

Gold hedging system – Four distinct hedging strategies (partial, dynamic, cross, and lock)

Multi-pair trading capability – Supports 30+ symbols including Forex, Metals, Crypto, and Indices

Single-pair mode – Focused trading on one instrument

Dynamic ATR-based settings – Stop-loss, take-profit, and offset adjustments based on market volatility

Three-level partial close – Progressive take-profit mechanism

Trailing stop mechanisms – Multiple trailing stop options

Risk management – Daily loss limits, profit targets, circuit breaker, and drawdown protection

Real-time dashboard – Toggle visibility with the 'D' key

Notification system – Alert delivery via email and platform notifications

Signal Scoring System

The EA evaluates trades using a scoring system with 14 signal components. Each signal receives a weighted score based on its significance in identifying potential reversals.

Primary Reversal Signals (High Weight)

Secondary Reversal Signals (Moderate Weight)

Tertiary Signals (Lower Weight)

The total score is calculated by summing all active signal components. Entries are triggered when the combined score exceeds the user-defined threshold.

Divergence Detection Mechanism

Regular Divergence

Regular divergence occurs when price makes a higher high while the indicator (RSI or MACD) makes a lower high, indicating weakening bullish momentum. Similarly, price making a lower low while the indicator makes a higher low indicates weakening bearish momentum. These patterns often signal trend reversals.

Hidden Divergence

Hidden divergence occurs when price makes a lower high while the indicator makes a higher high, indicating continuation of an uptrend. Similarly, price making a higher low while the indicator makes a lower low indicates continuation of a downtrend. These patterns help identify pullback entry opportunities.

Detection Method

The system compares price movement and indicator values across two distinct points in time. Divergence is confirmed when the relationship between price and indicator shows inconsistency relative to the preceding price movement.

Mean-Reversion Logic

The EA applies mean-reversion principles based on volatility bands:

Bollinger Band Analysis

• Price approaching upper band combined with bearish divergence may signal overbought conditions

• Price approaching lower band combined with bullish divergence may signal oversold conditions

• Squeeze patterns indicate volatility contraction that often precedes expansion and reversal

Support and Resistance Violation

• Price breaking below support with divergence confirmation indicates potential downward reversal

• Price breaking above resistance with divergence confirmation indicates potential upward reversal

Gold Hedging System

The EA includes a dedicated hedging system for Gold (XAUUSD) trading:

Partial Hedge

Activates a 50% opposite direction position when the current loss exceeds 1.5 times the ATR. This reduces exposure while maintaining the original position.

Dynamic Hedge

Scales up the hedge position progressively when the loss reaches 2.0 times the ATR. The hedge size increases proportionally to the loss magnitude.

Cross Hedge

Uses correlation between XAUUSD and DXY or EURUSD. A 10% hedge ratio is applied to offset Gold exposure through correlated instruments.

Lock Hedge

Closes all positions when the total profit approaches zero. This locks in remaining equity and prevents further drawdown.

Hedge Activation Conditions

Trading Modes

Single-Pair Mode

The EA analyzes and trades one specific pair on the chart to which it is attached. All signals and risk calculations apply to that single instrument. This mode is suitable for traders focusing on one pair or for smaller account balances.

Multi-Pair Mode

One EA instance manages multiple symbols from a single chart. The system reads data from all listed pairs in the Market Watch window. Each pair is evaluated independently, while global risk limits apply across all positions.

Multi-Pair Levels

Market Conditions for Optimal Performance

The Reversal Detection System performs best under specific market conditions:

Optimal Conditions

• Range-bound or sideways markets

• Overbought or oversold conditions

• Volatility contraction followed by expansion

• Strong support or resistance levels

Suboptimal Conditions

• Strong trending markets (trend-following systems may be more appropriate)

• News-driven volatility spikes

• Low liquidity periods

• Extreme market conditions

Risk Management Features

• Daily loss limit (user-configurable percentage)

• Daily profit target (stops new positions)

• Circuit breaker: 30% drawdown triggers full close and 24-hour pause

• Maximum concurrent positions limit

• Consecutive loss tracking with automatic risk reduction

• Auto-compounding option

• Kelly criterion position sizing

• Anti-martingale functionality

• Gold hedging system for drawdown protection

Requirements

• MetaTrader 5 platform

• Minimum recommended deposit: $100 for cent accounts, $500 for standard accounts

• Supported timeframes: all timeframes (M15 recommended for day trading, H1 for swing trading)

Setup Instructions

1. Attach the EA to a single chart (for example, EURUSD M15)

2. Select the desired trading mode (Single-Pair or Multi-Pair)

3. If using Multi-Pair mode, choose the appropriate level or define custom pairs

4. Configure divergence detection parameters

5. Set hedging parameters for Gold protection

6. Configure risk parameters (daily loss, position size, and related settings)

7. Test the EA on a demo account before live deployment

Important Notes

• The EA automatically detects broker suffixes such as .m, .c, .cent, .pro, and .ecn

• Maximum lot size protection is included

• Divergence detection sensitivity is adjustable

• The EA performs best in range-bound or moderately trending markets

• Gold hedging can be enabled or disabled independently

Frequently Asked Questions

What is the minimum deposit?
$100 for cent accounts, $500 for standard accounts.

Which timeframe works best?
M15 for day trading, H1 for swing trading. Higher timeframes may produce fewer signals with higher confidence.

When should I use this EA versus a trend-following system?
This EA is designed for range-bound or sideways markets. In strong trending markets, trend-following systems may be more appropriate.

How does the divergence detection work?
The system compares price movement and RSI values across two distinct time points. Regular divergence signals reversals, while hidden divergence signals continuation with pullback entries.

Does the Gold hedging system protect against drawdown?
Yes. The hedging system activates when losses reach specific thresholds, reducing exposure and protecting equity.

Can this EA be backtested?
Yes. Use the MultiTester feature for multi-pair backtesting.

How many activations are provided?
Activation limits are set by the seller at the time of purchase, with a minimum of 5 activations per buyer.

Disclaimer

Trading forex, cryptocurrencies, and indices carries a high level of risk. You may lose all of your invested capital. Reversal Detection System is a trading tool and does not guarantee profits.

Users are advised to:

• Perform backtesting and forward testing on demo accounts

• Apply appropriate risk management strategies

• Understand the system's functionality before live trading

• Avoid using emergency funds or borrowed capital

• Be aware that reversal strategies may produce lower win rates with higher reward-to-risk ratios

Past performance does not guarantee future results. Settings should be adjusted to current market conditions. By using this product, you acknowledge and accept these risks.