MetaTrader 4 (MT4) Indicators and Add-Ons: A Powerful Toolkit for Traders

What is MetaTrader 4? MetaTrader 4 (MT4) is an online trading platform that provides retail traders with access to a variety of financial markets, including forex and commodities.

The software was developed in 2005 by MetaQuotes, and despite MetaTrader 5 (MT5) being released in 2010, MT4 remains the most popular platform for retail traders. Why? Because it’s more than a gateway to financial markets.

MetaTrader 4 offers a powerful suite of inbuilt tools and features designed to empower you to make better informed decisions as a trader. Another compelling feature of MT4 is the customisability through third-party add-ons allowing you to tailor your trading experience to your preferences, which we’ll explore in this guide.

We’re not going to show you how to trade forex using MetaTrader 4. The objective of this guide is to highlight the features and add-ons you can use once you know how to use MT4. If you’re completely new to trading, check out our guide on how to use MT4, then come back here to see how you can get maximum value from the software.

MetaTrader 4 Indicators

MT4 is great for charting, but charts without indicators aren't particularly useful. Fortunately, MT4 comes with access to thousands of default and customisable indicators when you download MT4.

The most popular indicators built into the MetaTrader 4 platform are:

Moving Averages

You can identify moving averages in the MetaTrader 4 forex trading platform and use them for a variety of traded assets because they look at average price movements over a specific period. They’re known as lagging indicators because they use past data to identify future support or resistance levels.

Relative Strength Index (RSI)

You can judge the potential momentum of a price increase/decrease using RSI. This indicator measures the speed and magnitude of a price changes. The result indicates whether the security is over or undervalued.

Moving Average Convergence Divergence (MACD)

Our guide to MACD provides an in-depth look at this technical indicator and concepts integral to it, such as exponential moving averages. A simple definition of MACD is that it indicates potential entry and exit points based on average price movements over a specific timeframe.

Custom MetaTrader 4 Indicators

In addition to these standard technical indicators, forex MT4 traders have come up with their own indicators and solutions. These indicators are available via a public library inside MetaTrader 4. Some of the most popular custom MT4 indicators are:

• Order history indicator

  – overlay previous trades onto charts to easily view your past trades’ profits or losses.

• Pivot points indicator

  – paste pivot points onto charts and set up alerts so you can see potential upward and downward movements.

• High-low indicator

  – use this indicator to find historical price highs and lows for any timeframe.

• Renko indicator

  – add Renko blocks to charts so you can see price movements within small periods of time (i.e. movements within the block).

• Chart group indicator

  – link multiple charts on MT4 so you can simultaneously execute one action across multiple markets/assets.

• Freehand drawing indicator

  – draw lines manually so you can find potential patterns on MT4 charts.

Choosing the Right Indicators and Add-Ons

The number of options you get with MetaTrader 4 can be overwhelming. That’s why we recommend starting with the basics. Download the relevant MT4 software for your device and create an account.

After that, place a few simple buy/sell orders and get used to looking at the charts. Once you’ve done that, start adding indicators to your charts.

You can use our Trading Academy to learn more about indicators, as well as different trading strategies for forex, shares, precious metals, and other financial instruments. Once you’re comfortable with the basics, you can consider also using MetaTrader 4 add-ons.

Some suggested indicators to start with are as follows:

• Moving Average (MA)
• Exponential Moving Average (EMA)
• Stochastic Oscillator
• Moving Average Convergence Divergence (MACD)
• Relative Strength Index (RSI)

After mastering these indicators, start experimenting with the following:

• Bollinger Bands – a momentum indicator that helps you establish volatility by analysing where prices are high and low in relation to each other.
• Standard Deviation – this indicator allows you to look at prices in relation to an average. A high standard deviation means prices are moving a lot, and it’s potentially riskier. A low standard deviation means prices aren’t moving much, and risk is potentially lower.
• Average Directional Index (ADX) allows you to use +DI and -DI directional indicators to judge the strength of a trend.
• Fibonacci Retracement – you can look at two extremes on a chart and divide the vertical distance between them using Fibonacci ratios to identify support lines and resistance levels.
• Ichimoku Cloud – this collection of indicators is made up of five lines that show support and resistance levels over different time periods.

Finally, when you’re confident using standard trading indicators, you can consider using custom ones within the MT4 database. The important thing to remember is that you should only make decisions based on things you understand.

If you don’t know what Bollinger Bands are designed to indicate, it’s best to avoid using them until you’ve learned their purpose and nuances. Knowledge is power in trading, so the more informed you are, the less likely you are to make mistakes.

What’s more, you should use indicators that fit your style of trading. Some people like to make low-risk decisions based on moving averages. Others prefer to take bigger risks using RSI indicators. It’s also often a good idea to use multiple indicators to confirm trends and manage expectations.

The point here is that the indicators you use should align with your overall strategy. That’s why MT4 is such a powerful tool. The fact it offers thousands of indicators means you can find the right ones to fit your trading style.

Benefits of Using MT4

With the right knowledge and discipline, you’ve got every chance of making successful trades and getting maximum benefit from the MetaTrader 4 platform. There are also risks involved in trading, and you can learn about them here. As long as you accept this, there are plenty of reasons to use MT4.

Before we wrap up this overview of how to use MT4, here are some of its main benefits:

You can customise the interface to suit your level of experience and preferences. For example, you can add or remove tools and indicators to create a simple/more advanced setup.

You can view charts and add dozens of default indicators. You can also extract custom indicators from a huge public database.

You can deploy risk-management tools by default. Two of the most effective risk management tools you should use when you’re trading MetaTrader 4 securities are take-profit and stop-loss. Take-profit orders automatically close trades when you reach a predefined profit. Stop-loss orders automatically close trades when your loss reaches a certain amount.

You can add extra features to MT4. Third-party add-ons give you the ability to set up automatic trades, analyse charts in more advanced ways, customise the interface, and get alerts sent directly to the MT4 platform.

You can keep track of your trading history and export data easily with MT4 add-ons such as Excel RTD. This allows you to have a better overview of your results and gives you the ability to perform your own leaking plugging analysis, i.e. finding places where you’re leaking (aka losing) money. Exporting data is also useful for tax reporting purposes.

The power of MetaTrader 4 comes from its combination of inbuilt features and customisation options. Novice traders can download MT4 and use its default settings to start trading securities safely via any device. Similarly, advanced traders can customise the MetaTrader 4 software by installing third-party add-ons and indicators. We encourage you to explore all of the features at your disposal when you create a live trading account at TMGM and install MT4.