What Are Metatrader 4 Indicators?
The MetaTrader4 (MTF) provides you with a treasure trove of indicators to help you execute the right trades and maintain the best positions. Read to find out more.
Published August 17, 2021.
MetaTrader 4, also known as MT4, has been one of the most popular and widely used electronic trading platforms for online retail foreign exchange investing. After its development and release in 2005, MT4 has been the go-to technology for both retail and institutional investors.
Within the MT4 ecosystem, you can utilize any technical analysis tool at your disposal. That is, as long as you know how to exploit an indicator to advance your positions and ensure you are on the winning end of a trade.
First, trading indicators are calculations based on an investment's price or volume that could result in future prices as they guide you through day-to-day strategies. Second, while there are many forex indicators in the trading realm, there are several that you need to put in your back pocket for future reference.
Let's get acquainted with some of the more ubiquitous ones.
1. Moving Average Convergence Divergence (MACD)
Moving average convergence divergence, or MACD, is a trend-following indicator that spotlights the relationship between two moving averages of an investment's price. The purpose is to highlight the security's strength, direction, and momentum.
2. Average True Range (ATR)
Average true range (ATR) is a simple moving average (SMA) indicator that monitors the degree of price volatility rather than the indication of price movement. Ultimately, it can give you insight into how volatile a currency pair is, allowing you to know when you could enter and exit positions.
Orders can also be a helpful forex indicator to differentiate between your positions and others' trades. It is a welcomed technical analysis tool to see if you made the right trade or you are not applying the correct trading plan.
4. Breakout Zones
The breakout zone in MT4 is when the price surpasses or finishes the session above the upper red resistance line. This is an indicator to go long. On the other hand, breakout zones can also point to a price exceeding or closing the trading day below the lower red support line.
5. Relative Strength Index (RSI)
The relative strength index (RSI) is an indicator that tells investors the magnitude of the latest price changes. This helps you determine if the investment is overbought or oversold. Typically, anything below 30 suggests it is oversold or undervalued.
6. Money Flow Index (MFI)
Like the RSI, the money flow index (MFI) is a technical indicator to inform you if something is overbought or oversold by homing in on prices and volume data. Anything above 80 indicates it is overbought, while anything below 20 is believed to be oversold.
Use Indicators to Trade
Indeed, these are only the tip of the technical analysis tool iceberg. The world is your oyster when exploiting the vast number of indicators. Whatever you choose to incorporate into your overall investment strategy, be sure that you actually utilize them to your advantage. There is a reason why the pros use indicators on MT4 or every other trading platform: They work!