In this article, I’m going to discuss the Best MetaTrader indicators, ones that use in my day-to-day trading activities.
As you probably know, MetaTrader is trading software.
MetaTrader, also known as MT4 or MT5 is an electronic trading platform widely used by online retail for traders.
For any trader looking to gain substantial profit and decent levels of success in the forex market, it is imperative to have a structured-out strategy and risk management plan.
It is fundamental for any competent technical analyst and or trader in the forex market.
The end goal is to help any trader better understand the movement of price data in the market and make better trading decisions.
What are Indicators?
Indicators are tools that predict price movement. They are aggregators of price action.
These aggregators give you the average price of the open, high, low, and close of a candlestick or bar chart.
Different indicators on the Metatrader charting software are there for different purposes.
These indicators vary based on ease of understanding and scope of analysis.
List of indicators- Best MetaTrader indicators.
Here are the three of the best MetaTrader indicators in no particular order.
The MACD Indicator
The moving average convergence divergence popularly known as the MACD indicator is a popular MetaTrader indicator.
It simply calculates the difference between two moving averages.
It allows you to have access to two moving averages at the same time by giving you information on what is going between moving averages.
The MACD indicator comprises three moving averages.
They are the 26-day exponential moving average, the 12-day moving average, the signal line, and the histogram.
Information from the 12-day moving average is subtracted from the 26-day exponential moving average to represent an average of the two.
The signal line plays an important role in the overall efficiency of the MACD indicator.
What the signal line does is that it takes the last 9 averages of the MACD Line and represents that figure moving forward.
This usually results in the signal line being a smoothed-out version of the MACD line.
The last component of the MACD indicator is the histogram.
Technical analysts use the histogram to plot out the difference between the MACD line and the signal line.
Generally, the MACD line functions in an almost easy fashion.
When the MACD line crosses the signal line, it usually means that the market is going to follow the reaction of the MACD line.
Subsequently, this would result in a trade entry in that direction.
While this indicator can be statistically correct, it is important to use the MACD indicator alongside other market analyses.
This is because the MACD line and the signal line cross each other several times and this could create confusion if you don’t have a backup tool.
Relative strength index – RSI
The relative strength index is personally one I consider as one of the best MetaTrader indicators.
Unlike the moving average convergence divergence, the relative strength index gives a signal before a new trend or reversal takes place.
Using this information could help determine potential entry and exit trade signals.
To help identify potential momentum changes, there are two ranges of the indicator to keep in mind.
Overbought and oversold.
Overbought refers to a situation where a currency pair has been quite literally overbought.
This would be visualized as a pair that has increased rapidly in a short period of time.
on the contrary, oversold refers to a situation where a stock has decreased sharply over a short period of time.
In both situations, there may likely reverse, and the price may go higher or lower.
The RSI index is represented on a scale ranging from 0-to 100.
When the currency pair is overbought, it is represented by a value above 70.
This could indicate a potential downtrend waiting to happen.
The exact opposite is the case for an oversold stock.
In a situation where a stock goes below 30, it would indicate an oversold position.
When the RSI value goes below 30, technical analysts would see it as a buy signal.
It performs the function of calculating when an asset has been over-bought and over-sold.
The Bollinger band consists of three bands.
- The upper band,
- the middle band,
- and the lower band.
The first component the middle band is a 20 EMA.
The lower band and the upper band are two standard deviations from the mean.
The Bollinger band has two simple rules;
A currency pair market is overbought when the price action touches the upper band
Meanwhile; when the price is closer to the lower band, it would indicate an oversold market and an uptrend might be around the corner.
Other Notable Mentions;
- Moving average forex indicator
- How to use the Stochastic Indicator
- How to use the RSI indicator
- The Ichimoku Cloud – How to Use It in Forex Trading
- How To Use The ADX Indicator In Forex
- Three of The Best Indicators For Day Traders
- Three Best Indicators For Swing Trading
Conclusion – Best MetaTrader indicators
While these are the best MetaTrader indicators for technical analysts, it is important to note that these indicators do not guarantee profits.
These indicators greatly improve your chances of getting successful trade.
Although it is advisable to pay attention to things like the overall market trend.
As these trading indicators are much easier with the help of these other tools.