How to Set Up a Chart in MetaTrader 4
MetaTrader 4 is the trading platform used by almost every retail trader and this makes understanding its features mandatory. It is being said that it is extremely easy to use this trading platform, both for trading and for market analysis. The purpose of this article is to show you how to set up a chart using this trading platform, in a guide that should follow some concrete steps to achieve this. Before starting it should be mentioned that the following steps are working on all brokers that offer the MetaTrader 4 platform.
Steps to Set Up a Chart
Taking a position in the Forex market should be the result of both technical and fundamental analysis. While fundamental analysis is dealing with interpreting potential market reaction to economic news, technical analysis is all about charting. Therefore, being able to forecast future prices based on technical analysis is strongly related to being able to set up a chart. Here are the steps to follow when using the MetaTrader 4 trading platform.
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Step 1 – What Currency Pair to Trade
The first step is to decide what currency pair you want to trade. This is normally being the result of a due diligence process, one that considers both fundamental and technical reasons. Assuming one wants to look at the way a currency pair is moving and to apply some technical indicators on it, the first thing to do is to click on the Market Watch tab on the MetaTrader 4 platform, as it can be seen on the image below. This will result in the whole dashboard being displayed.
What you’ll see is a list of the currency pairs offered by the Forex broker. However, usually, those are not all the financial products offered to trade, as the default setting the platform uses doesn’t show everything.
To fully see the whole financial products range offered, just right click on any currency pair on the list above in the Market Watch tab, and select the Show All option. The image below shows the options that you have when you right click on any currency pair.
In doing that, all currency pairs available are going to be listed, together with any other financial instruments the broker offers. These can be indices, CFD’s (Contract for Difference), commodities (gold, oil, silver, etc.,) or other products.
Step 2 – Opening a Chart
The second step is to open a chart on that respective currency pair. If the trader wants to trade the GBPUSD pair, the thing to do is to select the pair, right-click on it, and then chose the Chart Window option. If you do that, a new chart will open with the GBPUSD pair, the timeframe being the hourly one. The default setup is the bar chart, but there are three types of charts one can use: bar, line or candlestick. Out of the three, the candlestick charts are the ones that offer the most information as the Japanese candlestick techniques are telling us much about both reversal patterns as well as a continuation or ranging ones. The default chart using a candlestick approach is looking like the image below. However, with this kind of chart one cannot do much of an analysis, so there is the need for some adjustment to be made.
The thing to do is to right-click anywhere on the chart and to set it up the way you want to. The following options will appear.
Step 3 – Setting the Chart
To set up the chart after right-clicking on it, the Properties tab must be selected. The options that appear can be seen on the chart below.
The top right box shows three possibilities for your chart: a bar chart, candlesticks or line chart. As explained earlier, a candlestick chart is an option that is chosen by most traders. The box below shows the OHLC (Open High Low Close) option, and, if selected, on the top left of the chart this information will appear. It is not recommended to select this feature as it will only make the chart looking too crowdy. The same OHLC information is offered without checking this box, by simply placing the mouse on any individual candle and looking at the line below the chart. All the information needed is there, as it can be seen above. Show grid is selected in the image above, but this would make the chart looking too crowded. Deselecting it would result in a clean black background. Perhaps the most important thing is to deselect the Chart Autoscroll option and select the Chart shift one. This way, you can go back in time to see past prices and levels, without the trading platform getting you back to the actual price. As you can see, these features can be selected from the Common tab, but there’s also a Colors tab available. If you use it, you can choose the color of the candles as well as the background and foreground. A classical setup uses the green color for the bullish candles and the red one for the bearish candle. This way, a bullish or a bearish trend can be easily identified. To sum up, there are multiple ways to set up a chart in MetaTrader, and this article is just listing a few of them. However, traders can set a chart the way they want, starting with the type of the chart and ending with the colors used. In the end, what matters is the correct interpretation of it. Trading on the long run implies a lot of time spent in front of the screens, so choosing the right color combination as well as the right trading setup is one thing that makes a difference between a successful trader and one that still struggles.
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.
- Financial Products to Trade
– Different categories of financial products that a Forex Broker is offering for the retail clients, starting with the classical currency pairs, and continuing with commodities, CFD’s, indexes, etc.
- Forex Trading Sessions and Their Importance
– Explaining the differences between the three Forex trading sessions, what are their importance, ranking, etc.
- Forex Brokers Types – ECN or STP?
– What is ECN, STP, how d- brokers deal with client’s orders, advantages, and disadvantages of the tw- types.
Other Educational Materials
- Forex Trading using MetaTrader 4 with the Fractal Market Hypothesis. Blackledge, J., & Murphy, K. (2011).
- Research on Automated Forex Trading System Based on BP Neural Network. Meng, L., & Sun, Y. (2013). In Advanced materials research (Vol. 753, pp. 3080-3083). Trans Tech Publications.