MetaTrader 4 (MT4) is the most widely used trading platform. Retail traders in all financial markets, especially the Forex market, consider MT4 to trade because of its user-friendly interface and the tools it offers.
What is the MT4 Indicator?
MT4 is an easy-to-use programming software with a user base known for its exceptional trade execution speed and comprehensive market visibility.
It compromises various technical indicators, which are sources for measuring market movement. Whether you are a beginner or an expert, MT4 provides basic and custom indicators for detailed market analysis.
MT4 is customizable and uses the MQL4 programming language to generate various forex indicators.
Here are the top 10 MT4 indicators used by professional traders.
First on the list is the MACD or Moving Average Convergence Divergence. MACD combines two moving averages to represent price movement. It is considered one of the best trending indicators and is used for intraday and swing trading.
How to use MACD?
MACD consists of two moving averages. 26-day EMA (exponential moving average) and 12-day EMA, subtract the 26-day EMA from the 12-day EMA for calculation. A 12-day EMA is the fastest. There is also a 9-day EMA that serves as a signal line and provides buy and sell signals.
A buy signal is generated when the 12-day EMA crosses the 9-day EMA above. On the other hand, if the 12-day EMA is below the 9-day EMA, it is a sell signal.
MACD can be used in conjunction with other forms of technical analysis, such as chart patterns. This makes the indicator more effective.
2. Relative Strength Index (RSI)
RSI is a momentum oscillator. It measures the rate of rise and fall in price and calculates the strength of the trend on a scale from 0 to 100.
How to use RSI?
When the RSI shows a value above 70, it is an overbought condition, which means there is strong buying pressure and the currency pair or asset is trading above its usual level. In this situation, you need to take a short position.
Conversely, if the RSI is below 30, it means you are oversold and the price will rebound. Oversold conditions can last for months or even years. Therefore, before entering a short position, traders must wait for confirmation.
Traders often use RSI in conjunction with other forms of technical analysis to identify trading signals.
3. Stochastic Momentum Indicators
Probability indicators are part of oscillator indicators such as RSI and CCI (Commodity Channel Index).
How to use probability indicators?
Probabilistic use in trend markets is different from various markets.
On the MT4 platform, the two lines %K and %D represent probability theory. K% is the current value of the stochastic and D% is the 3-period moving average of the K%.
A signal is formed when K% passes through D%. Stochastic has a value between 0 and 100. If the indicator shows a value above 80, you are overbought. And if the value is below 20, you are oversold.
Probability theory can often produce reversal signals, so traders should utilize it in conjunction with other technical analysis.
4. Fibonacci Retracement
This is another important indicator used by many experts. Identifies potential support and resistance levels.
How to use Fibonacci retracement?
Fibonacci retracement means that when the price moves significantly in one direction, it reverts to its previous price level and then moves back to its original level.
Fibonacci retracement is calculated by taking the two highest prices and then dividing them by the Fibonacci ratio. Fibonacci ratios are based on the Fibonacci sequence (0, 1, 1, 2, 3, 5, 8, 13, etc.).
Once these ratios are achieved, the trader can draw a horizontal line and identify resistance levels.
5. Bollinger Bands
Bollinger bands work similarly to Fibonacci retracements and identify support and resistance levels. It is part of a volatility indicator that measures price volatility.
How to use Bollinger Bands?
Bands expand or contract according to market volatility. Bollinger bands use three lines to represent volatility. SMA (simple moving average) with a value of 20, lower band (lower SMA value) and upper band (higher SMA value).
If the market is very volatile, the band widens and contracts as the volatility decreases.
Entry and exit points should be placed near the top and bottom bands. A short position is taken in the upper band and a long position is taken in the lower band limit.
6. Average Directionality Index (ADX)
ADX measures the strength of the current trend.
How do I use ADX?
Like RSI and Stochastics, it is a momentum oscillator and goes from 0 to 100.
Below 20 indicates a weak trend and above 50 indicates a strong trend.
ADX can also be used as an invert indicator. It refers to whether the current trend is likely to reverse in the future.
7. Money Flow Index (MFI)
MFI is a volume indicator that finds the level of supply and demand for a particular asset.
How to use MFI?
Find price movements and display tick volumes on a chart. It informs traders about the supply and demand flow of an asset.
The default period for MFI is 14 and can be adjusted accordingly. MFI ranges from 0 to 100. A value above 80 is an overbought condition and a value below 20 is an oversold condition.
8. Parabolic SAR
Parabolic SARs (stops and reversals) determine the end of a trend.
How to use Parabolic SAR?
Indicators show dots and dots on a chart to identify trend reversals. When the dot goes down the candle, it is a positive signal and you need to type it long.
Conversely, if the dot falls below the candle, it is a negative signal and should be entered briefly.
Parabolic SARs work well in trending markets.
9. Hammer / Hanging Man Indicator
These indicators are candlestick-based patterns that describe potential reversals.
How to use the hammer/hanging man indicator?
The hanging man is a bearish reversal pattern and appears in an uptrend. Its structure includes a longer lower wick with little or no upper wick. Inform the trader to close the long position.
The hammer is a bullish reversal candlestick pattern and is in a downtrend. It has a hammer-like structure with a longer lower wick and a smaller body.
10. Change the percentage indicator
As the name suggests, the percent change indicator defines the price change as a percentage.
How to use the Change Percentage metric?
To use the indicator, you need to set a specific time frame, such as daily or monthly. The indicator then analyzes historical and current data to calculate price movements.
There is no 100% accurate indicator. To trade effectively, these indicators must be combined with other forms of technical analysis.
The MT4 Top 10 Indicators provide an opportunity to detect various characteristics and patterns in price dynamics that cannot be seen with the naked eye.
Based on the information, traders can assume further price movements and adjust their strategies accordingly.
All of the indicators mentioned above are free, so you can download them at no extra cost.
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MT4 indicator installation instructions
How do I install the MT4 indicator?
- Download the MT4 indicator (mq4) file.
- (mq4) files in the Metatrader directory / experts / indicators /
- Start or restart the Metatrader 4 client
- Choose a chart and time period to test your MT4 indicators on.
- Search for “Custom Metrics” in the navigator, which remains mostly in the Metatrader 4 client.
- (mq4) file right click.
- attach to chart
- Edit the settings or click OK.
- MT4 indicators are available in charts.
How to remove MT4 Indicator (mq4) files from Metatrader Chart?
- In the Metatrader 4 client, select the chart on which the indicator runs.
- right click on the chart
- “List of Indicators”
- Select a metric and delete it
Click here to download.
Download MT4 Top 10 Indicators (Free)