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How to create MT4 indicators

MetaTrader 4 is one of the most popular online trading platforms across the world for both retail and professional traders. It allows traders to analyse the financial markets such as forex, indices and commodities, using a range of technical indicators, charts and graphs. These indicators are particularly useful for short-term traders, who tend to focus more on the technical analysis of a trade, rather than the fundamental aspects. Technical analysis focuses on quantitative data, including financial market statistics, price movement and volume, lines of support and resistance and many other aspects that help to predict future market movements.

However, trading strategies can be approached differently by each individual trader, which is why many choose to create custom MT4 indicators. This allows you to take into consideration all aspects of your trade, rather than simply the priorities, and come up with an effective and targeted indicator.

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MetaTrader 4 indicators explained

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.

Creating expert advisors in MT4

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.

Leading indicators in MT4

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​.

How to edit MT4 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.

  • Custom RSI indicator​. A custom version can include coloured lines for clearer graphs, price alerts for overbought or oversold positions, and push notifications on your preferred method of communication.
  • Custom Ichimoku indicator​. By introducing fill colour variables to predict upward and downward trends, this can also help to predict market volatility. Some traders also try to quantify the indicator by measuring Kumo thickness, Kumo twists and Kumo breakouts by combining the Ichimoku indicator with others, including the SMA.
  • Custom Fibonacci retracements indicator​. It is possible to customise the indicator’s parameters, add and remove retracement levels, change colouring of patterns, select breakout periods and enable communication alerts.
  • Custom MACD indicator​. The standard indicator has the option to add and set default to multiple timeframes, turn off the visible histogram, and show dots at the cross of the MACD and signal line.
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How to create MT4 indicators online

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.

How to install indicators on MT4

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.

  • The MT4 platform is available in more than 22 languages through our online trading app, on handheld devices including iPhone and Android.
  • We offer some of the most competitive spreads within the trading industry.
  • Analyse the financial markets with free MetaTrader indicators and add-ons​​, drawing tools and advanced charts, or create your own custom MT4 indicator using the above steps.

If you would like to trade on the underlying price movements of shares, ETFs or any other financial market, you may be better suited for our online trading platform, Next Generation. Here, we offer both spread betting and CFD trading on more than 10,000 financial instruments. Open an account to get started.

With us, you are able to trade on the highest number of forex pairs in the industry with over 330, including major forex pairs such as EUR/USD and GBP/USD. Popular indices include the UK 100 and our commodities market spans over agriculture, energy and precious metals. To decide which platform will be more suitable for your trading style and preference, consult our full article exploring the differences between Next Generation vs MT4​.

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