How to create MT4 indicators

Technical indicators demonstrate trend lines on a price chart. In particular, traders aim to identify support and resistance levels to see how an asset is fluctuating in price. Time is also a very important factor in choosing the right indicator, as profits and losses can exceed one another within a matter of seconds in a short-term trade, such as day trading. This is because day trading strategies aim to take advantage of small price movements by closing out the position before the end of the day.

There are two main types of technical indicators used for trading in MT4, which are known as leading and lagging indicators. When analysing a price chart for market trends, a leading indicator will inform traders before the new trend or reversal happens. On the other hand, a lagging indicator informs the trader of the new trend while it is happening in that moment. There are benefits and downsides to both of these types of MT4 indicators. For example, when accurately predicted, leading indicators can ensure profits for the trader.

However, it is not possible to have full consistency in pattern recognition, and can often mislead the trader into entering a market with unrealistic expectations. Lagging indicators only prompt the trader to open a position with full certainty of the market trend, which is a benefit over leading indicators. However, in reference to day trading above, you may lose out an initial period of profit by entering late to a trade.

MT4 indicators using multiple timeframes​ are very useful for both long-term and short-term traders. This tool allows you to see the same standard indicators on the platform in separate windows across multiple timeframes. It can be used with the majority of forex technical indicators.

The platform also makes use of Expert Advisors (EAs), which contribute to automation​​ of the trading process. EAs are essentially automated robots built out of a generated code that is called MetaQuotes Language 4 (MQL4). Once you install an EA onto the platform, it will follow the traders’ instructions automatically and help to speed along the process, which is particularly useful for those who trade in volume or do not have the time to trade on a full-time basis.

Expert Advisors are skilled in technical analysis and can trade freely through signals that they receive from the system, including from new or custom indicators. Some traders like to create their own Expert Advisor on MT4 along with the indicators, so that they can be customised to their trading preferences and work compatibly together.

There is a large number of free MetaTrader indicators on the platform, as well as having the option to customise existing indicators for a specific purpose. Forex MetaTrader indicators are perhaps the most popular. Some indicators that can be used in the forex market include Bollinger Bands, simple moving average (SMA), relative strength index (RSI), among many other stochastic oscillators and money management tools. Some forex MT4 indicators aim to predict both price movements and lines of support and resistance at the same time, however, this is not always possible. Learn about leading and lagging indicators​.

Common custom forex indicators that are tailored towards making a profit from currency pairs​​ include the following list. The original indicators come free with the MT4 platform but can be lacking a few features that traders depend on for consistency; therefore, it is possible to install a custom version. These can often be applied to other markets such as commodities and indices also.

If traders cannot customise existing technical indicators to their preferences, they often prefer to create an MT4 indicator online. In order to start building a custom MT4 indicator, you should be familiar with MQL4 and MetaEditor tools. Register for an MT4 account to get started.

Firstly: you must choose what type of indicator you would like to build: leading or lagging. You will also need to consider whether the indicator contains only core elements of technical analysis, such as pattern recognition and mathematical calculations, or if it combines elements from existing indicators, such as moving averages and the RSI indicator.

Secondly: you will need to fill in all properties of your new custom indicator. This includes an indicator name, details of the developer and a list of indicator inputs and parameters, and you can decide whether it should be created in a separate window, along with its range. All of these elements help the indicator to draw trend lines within the technical charts.

Thirdly: this process will create a file with the defined settings of the custom indicator. Located within the EA folder, you can choose to open this data folder in order to start writing the indicator’s new rules and coding. If you decide that you would like to create an EA from your customer indicator, you will need to familiarise yourself with the EA builder. Each Expert can have its own settings and you will need to incorporate it within your chart to begin the analysis.

It is vital to assess your indicator through backtesting​, in order to replace any elements that do not work for your trading strategy or the particular market that you are trading on. Once it starts to provide successful returns for your trading plan, it can be put to use within the live market.

If you are interested in creating your own technical indicators on MT4, start by opening an account to start trading CFDs on the forex, indices and commodities markets. We offer CFD trading on MetaTrader 4 for a range of financial markets, and our MT4 spreads match those of our own online trading platform, Next Generation.