Most powerful MetaTrader 4 indicators
Traders use multiple types of analysis to monitor prices in the Forex market. The most widely used type is technical analysis. It involves monitoring previous data in the market to predict future trends. MetaTrader 4 indicators are used for technical analysis.
Since traders can use more than one indicator, this article is about the best MetaTrader 4 indicators for putting your trading strategies into action.
What are the best MT4 indicators?
There are multiple MT4 indicators, but you need to choose the one that goes best with your trading strategy. Below is a list of the best MT4 indicators and their purposes:
MACD
MACD stands for the “Moving Average Convergence Divergence" indicator. It is one of the most well-known Forex MT4 indicators and shows the relationship between two prices. There are multiple ways through which MACD interprets data. If the MT4 MACD is above the signal line, buy the asset; if it is below, sell it. If MACD and the price are diverging, it means that the trend has ended. If MACD goes up quickly, it means that the asset has been bought too much and will go back to normal soon.
On Balance Volume indicator
The On Balance Volume (OBV) indicator in MT4 measures negative and positive volume flows in an instrument in relation to its price over time. Depending on the price change, it adds or subtracts each period's volume to keep a cumulative total. Additionally, this goes beyond just measuring volume. It combines volume and price fluctuation. This indicator was designed with the idea that volume would go up before a change in price.
Money Flow Index (MFI)
MFI uses the price and volume of an instrument to make predictions. It is best to use a 14-day period for calculating this indicator. A positive value shows that the money flow is positive, whereas it is the opposite in the case of a negative value.
Average directional moving index (ADX)
ADX indicator measures how weak or strong the current trend of an asset is. Its value ranges from 1 to 100. A value above 25 indicates a strong trend, a value above 50 is very strong, and a value above 75 is considered extremely strong.
Bollinger Bands
Bollinger Bands is one of the best MT4 indicators for Forex traders. It has two bands, or lines, that are two standard deviations below and above a moving average, which is shown as a line in the middle of the two bands. When the bands get wider, it means that the price is more volatile. When the bands move closer together, it means that the price is less volatile.
Other well-known indicators are ATR, Gentor CCI, MA Channels, FIBO, Bulls Power, Alligator, etcetera.
What are the best MT4 indicators for day trading?
Below is a compilation of the best MT4 indicators for day trading:
Relative Strength Indicator (RSI): This indicator plots recent gains of prices along with current loss of prices which fluctuate between 0 to 100. Through this indicator, the momentum and strength of the trend are determined. It mainly determines whether an instrument is overbought or oversold.
Buy Sell Magic Indicator: This indicator plots buy and sell signals on a chart that indicates prices. Forex traders get a buying signal if the arrow is green, and when the trade signal is the opposite, it is better to exit the market.
Stochastic Oscillator: It is an indicator that compares price ranges from a certain period to current prices. In case of an upwards trend, the prices achieve new highs. It is suggested to keep stochastic at 100.
Aroon Indicator: This indicator shows whether an instrument is trending. Moreover, it also indicates whether the prices will be high or low throughout a specific period. It also predicts if a new trend is about to start. When the Aroon-up line is above the Aroon-down line, it is indicated that there might be a shift in the trend. If the Aroon-up line reaches 100 and stays nearby, whereas the Aroon-down line stays close to zero, there is an upward trend.
What are the best Forex indicators for swing trading?
Swing trading makes it easy for traders to make use of any fluctuations in the prices of a security. Below is a list of indicators that you can use for swing trading:
Moving Average (MA): Moving Average is an indicator that has been used for several years to analyze instruments and shares of companies. It takes an asset's average price movements throughout a specific period. In this way, any short-term volatility is smoothed out and minimizes confusion.
Bollinger Bands: This indicator has a moving average line, a positive standard deviation line, and a negative standard deviation line. It is preferred by swing traders because it quickly reads a trend, a commodity's overbought and oversold levels, and volatility. As volatility increases, the width of BB increases, but as it decreases, the width decreases as well.
Ease of Movement: The ease of movement (EOM) indicator shows the relationship between the rate at which an asset's price changes and its volume. As the EOM rises from the zero level, it indicates that prices are advancing, whereas as prices fall below the base (zero) level, it suggests a fall in the market.
What is the best MT4 indicator for beginners?
As a beginner, you will need indicators that are easy to use and do not create confusion. Therefore, we have compiled a list of indicators that you can use:
MACD: As mentioned previously, MACD shows the relationship between the average prices of an instrument. Beginners are required to monitor the MACD and the signal line. If the MACD line is above the signal line, you should buy or sell the security.
On Balance Volume: This indicator shows the trading volume's positive and negative flow. It is a well-known phenomenon that any changes in the market volume occur before the prices change. An increase in the currency indicates an increase in currency volume in a bull market, whereas if the currency decreases, the currency volume increases in a bear market.
Order History indicator: This is an indicator through which you can easily see your past transactions, successes, and failures. This indicator makes it easy to find out how to repeat past successes or take advantage of missed chances.
FAQ
Why is MACD the most famous indicator?
Forex traders frequently use MACD. The reason is that it compares price averages and how they relate to each other. Moreover, it also tracks a momentum trend.
What is MT5?
MT5 is a more advanced version of MT4. MT4 is a specialized tool for Forex trading, whereas MT5 has more uses, such as predicting stocks, futures, as well as the contract for differences (CFDs)
Can TradingView and MT4 be used simultaneously?
TradingView and MT4 are competitors. Traders should use TradingView and MT4 simultaneously to gain access to additional features.
What is the purpose of a broker in MT4?
You can only perform real trades through a broker. You will need to open an account with a broker that supports MT4.
Team that worked on the article
Oleg Tkachenko is an economic analyst and risk manager having more than 14 years of experience in working with systemically important banks, investment companies, and analytical platforms. He has been a Traders Union analyst since 2018. His primary specialties are analysis and prediction of price tendencies in the Forex, stock, commodity, and cryptocurrency markets, as well as the development of trading strategies and individual risk management systems. He also analyzes nonstandard investing markets and studies trading psychology.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
Olga’s motto: Do well and you’ll be well!