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 of its features mandatory. It is widely considered to be 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 follows some concrete steps to achieve this. Before starting, it should be mentioned that the following steps work with 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 a technical and a fundamental analysis. While fundamental analysis deals 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…
Step 1 – What Currency Pair to Trade
The first step is to decide what currency pair you want to trade. This is normally the result of a due diligence process, one that considers both fundamental and technical factors. 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 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, these are not usually all of the financial products offered for trading, as the default setting the platform uses doesn’t show everything.
To fully see the whole range of financial products on offer, 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.
By doing that, all currency pairs available will be listed, together with any other financial instruments the broker offers. These can be indices, CFDs (Contracts 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 particular currency pair. If the trader wants to trade the GBP/USD pair, the thing to do is to select the pair, right-click on it, and then choose the Chart Window option. If you do that, a new chart will open with the GBP/USD pair, the timeframe being the hourly one. The default set-up 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 tell us much about reversal patterns as well as a continuations, or ranging ones. The default chart using a candlestick approach looks like the image below. However, one cannot do much of an analysis with this kind of chart, so there is a 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 up 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 a line chart. As explained earlier, a candlestick chart is the option that is chosen by most traders. The box below shows the Open High, Low Close (OHLC) option, and, if selected, this information will appear on the top left of the chart. It is not recommended that you select this feature, as it will only make the chart look too cluttered. 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 can be seen above. “Show Grid” is selected in the image above, but this would make the chart look too crowded, whereas 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 colour of the candles as well as the background and foreground. A classical set-up uses green for bullish candles and red for bearish candles. In 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 lists just a few of them. However, traders can set up a chart the way they want, starting with the type of the chart and ending with the colours used. In the end, what matters is the correct interpretation of it. Trading in the long run implies a lot of time spent in front of the screens, so choosing the right colour combination as well as the right trading set-up is one thing that makes a difference between a successful trader and one who still struggles.
Recommended Further Readings
- Forex Trading – Explaining the Concept
– What is Forex trading? Generalities about trading the currency market.
- Why Trade Forex?
– Advantages and disadvantages of trading the currency market; trader’s expectations; and 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 organised; and how many types of Forex brokers exist.
- Financial Products to Trade
– Different categories of financial products that a Forex Broker offers for retail clients, starting with the classical currency pairs, and continuing with commodities, CFDs, indexes, etc.
- Forex Trading Sessions and Their Importance
– Explaining the differences between the three Forex trading sessions, their importance and ranking, etc.
- Forex Brokers Types – ECN or STP?
– What is ECN, and what is STP? How brokers deal with client’s orders; and advantages and disadvantages of the two 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.