Overthrow, the outside bar reversal MT4 indicator that marks the change of power
Some candles do not just move price, they take over. A single big candle opens, pushes past the previous high, then turns around and closes below the previous low. In one bar the old side lost control. Overthrow is an outside bar reversal MT4 indicator that spots that takeover at a fresh extreme and fires one arrow as soon as the candle closes.
The arrow does not repaint, does not move and does not disappear. It needs a closed candle, and once it prints, it stays on the chart exactly where it printed.
Click the image to enlarge
Real chart, GBPUSD on M15. A small candle sits at the top of the push. Then one big candle swallows it whole and closes far below its low. The sell arrow prints at 1.34112. Because the takeover candle itself is large, the stop above its high at 1.34598 is a wider 49 pips. Even so, the pound fell to 1.33356, a move of 75 pips. On EURUSD M15 the same event gave 46 pips for a 46 pip stop. Every price comes from the exact candle history of those charts.
What an outside bar reversal tells you
An outside bar is a candle whose high is above the previous high and whose low is below the previous low. In price action trading it is a sign that both sides fought hard inside one candle. Then the close tells you who won.
When that happens at the top of a rally and the candle closes near its low, the buyers who pushed to the new high are now trapped. As a result, their exits add fuel to the drop. However, outside bars in the middle of a range mean very little, therefore Overthrow ignores them.
What Overthrow checks before it fires
- The takeover. The candle must swallow the previous one completely, high and low.
- Real size. Its range has to be bigger than a normal candle of that market, so tiny outside bars stay silent.
- A fresh extreme. It must print the highest high, or lowest low, of the last ten candles.
- The close. It must close past the other end of the previous candle, in the new direction.
In short, the arrow only appears where the market pushed to a new extreme and then flipped hard in the same candle.
How to trade the outside bar reversal MT4 signals
- Enter on the close of the takeover candle. The flip already happened.
- Stop beyond the extreme of that candle. If price gets back there, the reversal failed.
- Size down when the candle is huge. Since the stop depends on the candle, a very big takeover means a wider stop, so trade a smaller lot.
- Aim for at least the size of your risk, then trail the rest towards the start of the move.
Markets and timeframes
| EURUSD | M15 |
| GBPUSD | M15 |
| Other pairs | M15 and M30 work with the same rules |
M15 on the two big euro and pound pairs is where this outside bar reversal MT4 tool looked best. Also, the takeovers that matter most tend to come during the London and New York sessions.
What is inside
- Outside bar reversals in both directions.
- Size filter against the average candle, fresh extreme filter and full takeover filter, all editable.
- Arrows on closed candles only. They do not repaint, move or disappear.
- Popup, sound, push and email alerts, each one switchable.
- Premium dark chart theme, applied on attach and restored on remove.
Besides, it reads price only, so any broker and any account works. If you want robots that trade by themselves, browse our automated robots, and the rest of the manual set is in our chart tools for traders.
Questions about this outside bar reversal MT4 indicator
Does it repaint? No. The arrow needs a closed candle. Once it prints, it does not move and it does not disappear.
Is this the same as an engulfing pattern? Close, but not the same. An engulfing pattern compares bodies, while an outside bar compares the whole candle, shadows included, which makes it a stronger takeover.
Why is the stop sometimes wide? Because the stop goes beyond the takeover candle, and on news those candles can be big. Adjust your lot to the stop, never the other way around.
Do you have the other version? Yes. This is the MetaTrader 4 build, and Overthrow for MT5 spots the same takeovers on MetaTrader 4.
Trading involves risk. Signals are information, not advice, so try any new tool on a demo account first and only trade money you can afford to lose.
