Reading time: 8 minutes
Were you aware that although MetaTrader trading platforms offer in excess of 30 built-in technical indicators, more than 2,000 custom indicators are available?
MQL5’s community boasts an extensive library of custom trading indicators for MetaTrader 4 (MT4) and MetaTrader 5 (MT5) users. From basic candlestick detection to advanced Harmonic pattern indicators, CFD and Forex traders are free to browse and download custom indicators direct from MQL5. Additionally, traders can order custom-designed trading applications from professional freelance developers.
MT4 is an established trading platform, serving traders since 2005. Five years on, MT5 made an entrance. MT5 is a multi-asset trading platform that allows traders to engage in Forex trading, along with trading on stocks and futures. While MT5 has yet to surpass its predecessor, MetaQuotes, the developers behind MT4/MT5, state MT5 was a breakthrough in trading software.
To gain access to MQL5’s vast library of indicators, traders must sign up to MQL5’s community and have an active MT4 trading account. This can be a live or demo account.
Once logged in (figure 1.A), select the Market tab on the upper panel and click on Indicators under MetaTrader 4’s subheading (orange box). This article focuses on Free downloads, though filtering the search by Popular, New and Paid technical indicators is an option (red box). Traders can further customise their search by selecting Indicator Type, Star Rating and Reviews at the bottom left-hand corner of the page.
(Figure 1.A: MetaTrader 5 MQL5)
MT4 Indicators: 2021 Picks
Technical indicators are based on mathematical calculations, largely derived from historical price action and volume, whether that be in the Forex market (think currency pairs – Forex trading or FX trading) or CFDs in other financial markets, such as cryptocurrencies, commodities or indices, for example.
In general, technical indicators fit into four categories: trend indicators, oscillators, volatility and support/resistance.
Traders use technical indicators in several ways, often adjusted to suit different trading methodologies. As an example, a range trader may employ oscillators to gauge momentum by way of divergence signals and overbought and oversold conditions. Breakout traders, on the other hand, may focus on volatility, employing Bollinger Bands.
A variation of the moving average crossover, the MACD (Moving Average Convergence Divergence) is calculated using the difference between two exponential moving averages (default periods: 26-period EMA / 12-period EMA).
Plotted alongside a Signal Line (an EMA of the MACD value [9-period EMA is common]) and a Histogram, the MACD uses momentum, calculated as the difference between two EMAs. It is labelled an oscillator, yet unlike many other oscillators it is unbounded – particularly useful in trending environments.
While MT4 provides a built-in version of MACD, it is limited to the MACD line and Histogram. To help solve this issue, traders can download the TT MACD indicator from MQL5. By clicking the Free tab and downloading the indicator (figure 1.B), assuming the trader has an active MT4 trading account, the download automatically installs in MT4’s custom indicators. Once applied to the chart, users will have access to the full version of MACD (figure 1.C).
(Figure 1.B: MQL5)
(Figure 1.C: MetaTrader 4 USD/JPY H4 chart)
Round Numbers Indicator:
Round numbers, or psychological levels, serve as objective support and resistance levels. Traders often use these levels as a location to establish entry and exit rules. For example, breakout strategies are popular buy and sell signals around round numbers, yet bear in mind whipsaws are also a common occurrence.
Although straightforward to apply these levels, employing the Round Numbers Indicators saves time. As a bonus, the indicator applies .0050 round numbers, too (figure 1.D).
(Figure 1.D: MQL5 Indicator Download; MetaTrader 4 USD/JPY H4 chart)
Colour Levels Indicator:
Colour Levels is a useful custom indicator for price action traders (figure 2.A).
Colour Levels provides easy access to rectangles and horizontal levels through a selection tab positioned at the upper left corner of the chart. This enables traders to apply support and resistance areas without having to go through the main toolbox.
Traders are also free to alter colour settings to suit trading preferences.
(Figure 2.A: MQL5 Indicator Download; MetaTrader 4 USD/JPY H4 chart)
Pin Bar Indicator:
Steve Nison is widely credited for bringing Japanese candlestick analysis to the western world. Popular candlestick patterns are shooting stars or hammer patterns, yet Martin Pring refers to them as pin bars, or ‘Pinocchio bars’. Though both essentially indicate the same thing.
A shooting star, a bearish candlestick signal, forms by way of a long upper shadow, and a small real body near the low of the day, or period. The hammer is a mirror version of a shooting star and represents a bullish candlestick formation.
The Pin Bar Indicator helps identify these patterns in real-time on any timeframe, highlighted with a green cross (figure 2.B). Therefore, the indicator is suitable not only for position traders (long-term traders), but also intraday traders (day trading/scalping [scalpers]).
(Figure 2.B: MQL5 Indicator Download; MetaTrader 4 USD/JPY H4 chart)
Today, technical analysts are spoilt for choice with indicators.
While the above indicator downloads are worthy of consideration as we step into 2021, tried and tested built-in MT4 Forex indicators still remain a must for many trading strategies, such as Bollinger Bands and the Relative Strength Index (RSI), a well-known momentum oscillator similar to the MACD.
Disclaimer: The information contained in this material is intended for general advice only. It does not take into account your investment objectives, financial situation or particular needs. FP Markets has made every effort to ensure the accuracy of the information as at the date of publication. FP Markets does not give any warranty or representation as to the material. Examples included in this material are for illustrative purposes only. To the extent permitted by law, FP Markets and its employees shall not be liable for any loss or damage arising in any way (including by way of negligence) from or in connection with any information provided in or omitted from this material. Features of the FP Markets products including applicable fees and charges are outlined in the Product Disclosure Statements available from FP Markets website, www.fpmarkets.com and should be considered before deciding to deal in those products. Derivatives are complex instruments can be high risk; losses can exceed your initial payment. FP Markets recommends that you seek independent advice. First Prudential Markets Pty Ltd trading as FP Markets ABN 16 112 600 281, Australian Financial Services License Number 286354.