Like any trading platform, the MetaTrader is offering plenty of technical analysis possibilities. It has multiple features incorporated, and below are only some of the ones offered with the standard, default settings:
Trend indicators: Indicators that fall in this category are indicators designed to follow an underlying trend for a currency pair. The bigger the time frame used, the bigger the implications and the stronger the trend is.
Oscillators: These indicators are used to identify divergences or fake moves the price makes at any moment of time. These are coming in the form of various highs or lows that are not confirmed by the oscillator.
Fibonacci tools: The most popular ones here are the retracement and expansion tools, but also time zones and arcs have important uses in technical analysis.
Andrew’s Pitchfork: A powerful tool for riding a trend and spotting the end of it.
Different types of charts: Bar, line and candlestick charts can be used on the MetaTrader platform, depending on the trading style and the tools needed to trade the market.
Gann tools are offered by default, as well as other indicators that are neither trend nor oscillators or are in a different category because they have a special interpretation: volumes, standard deviation, and so on.
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All these are part of the technical analysis and any trader that has some experience knows how to use them. Of course, each trader has his/her own trading style, meaning that different strategies are used by different traders. As a rule of thumb, the bigger the number the indicators one is looking at, the bigger the chances that trading will not be successful. Like in any regular job, traders are becoming experts in a system that is traded on and on.
Trading with a Custom Indicator
The indicators listed above made the object of various articles here on the Trading Academy, and we’re not going to insist more on this subject. But it should be known that these are not the only indicators that can be used in technical analysis. The MetaTrader gives the possibility to code your own strategy. The MetaEditor, on the other hand, is not used only to create expert advisors (robots to automatically trade the currency market), but also to create custom indicators.
Steps to Create and Import a Custom Indicator
A custom indicator is one that is not in the default settings the trading platform is offering. It can be a new one, created from scratch, or it can be an indicator that is being bought from a third party and needs to be imported to the trading platform so it can be used. An indicator can be created with the MetaEditor and saved somewhere on the computer. It has two possible extensions, both being recognized by the trading platform. After a new indicator is created, or a new one is bought, these are the steps to follow:
1. From the File tab (the first one on the top left of the main MetaTrader menu) chose the “Open data folder”. A new popup window will open with the place on the computer where the MetaTrader Files are saved.
These is a recent change in the MetaTrader as a few years ago it was a bit more difficult to find were the root files on the computer are. Now it is straightforward.
2. From the newly opened folder in the computer, select the MQL4 as shown in the picture below.
Before moving to the next step, the previous steps can be used to save different MetaTrader platforms, from the same broker, on the same computer. The only secret is to change the name in the destination file, otherwise the newly downloaded platform will over-right the previous one.
3. From the list of folders that follows, select the Indicators one. This is the place where all the indicators that can be found on the MetaTrader are on the computer.
Open the Indicators folder and Paste there the newly created indicator. This is it, now the custom indicator created is on the trading platform.
4. However, there’s a catch! If the trading platform was open during all this process, if you look under the Common Indicators tab, the indicator is not there. The secret is to simply close the trading platform and open it again.
The Navigator menu shows all the custom indicators and the newly imported one should be found in the list above. To use it, it’s simple: simply click and drag it over the intended chart that must be already opened in the window on the right side of this list.
Why are Custom Indicators Important?
Technical analysis is a vast field. So vast, that trading strategies are always invented as the market is changing constantly. What is valid today, it may not be valid tomorrow, as market conditions are ever-changing. A ranging environment that took years and years is valid for a ranging strategy, but when the range is over and volatility explodes, that strategy will start losing money. For this reason, there is always something new to be interpreted. This is not a bad thing, and to address this, new indicators are needed. Besides trading indicators, there are numerous other trading tools to be used in the field of technical analysis. Trading theories are an example, and in this area, the most famous are the Elliott Waves theory, Point and Figure, Gartley, Gann, Drummond Geometry, Hurst Cycles, and so on. All of them are having at least parts of the theory programmed as indicators and traders simply need to import them on the trading platform. This is what this article and guide are for: to help traders import the various technical analysis indicators to a trading platform so that they can be incorporated in the decision-making process. In doing that, all necessary instruments are available for successful trading. However, I’ll get back to one of the main points of this article: too many indicators or strategies used at the same time will harm a trading account.
Recommended Further Readings
- Forex Trading – Explaining the Concept
– What is forex trading, generalities about trading the currency market. - Why Trading Forex?
– Advantages and disadvantages of trading the currency market, what are trader’s expectations and what is a realistic approach to follow - What is a Forex Broker and Types of Brokerage houses
– Explaining what a Forex broker is and does, how the business should be organized, and how many types of Forex brokers exist - Fundamental Analysis – Explaining the United Kingdom Economic Data
– Covering the economic data that matters for the GBP pairs - Fundamental Analysis – Explaining the Canadian Economic Data
– Covering the economic data that matters for the CAD pairs - Fundamental Analysis – Explaining the Australian Economic Data
– Covering the economic data that matters for the AUD pairs
Other Educational Materials
- “Technical Analysis in Forex: A Strategy for Individual Trader in Intra-Day Trading.” Linden, Miikka. (2009)
- Energy Commodities Trading Using a Phase Signal Derived from the Levy Index of Price and Volatility.” Blackledge, Jonathan, Derek Kearney, Claire Farrell, and Grace Kearney. “E (2012)
