iExpertAdvisor iBulletin 45: MT4 Indicators For The New Forex Trader

                        information and ideas about MetaTrader ExpertAdvisors

One of the most exciting advances in the retail foreign exchange market during the last few years has been the emergence of MetaTrader 4.

MT4 has literally taken over the retail space, as virtually every major broker in the United States now offers it as a charting package of choice.  Although there are several key features that have helped MT4 explode into widespread community acceptance, one of the most popular features is its custom language, MQL4.

The developers of MT4 created a programming language that is easy to use and very effective.  MQL4 makes it possible for traders to code out their trading ideas into proprietary indicators and fully functional expert advisors.  In this article, we are going to discuss a few of the most popular MT4 indicators for the new forex trader.

ADR

The Average Daily Range indicator is one of the most basic, yet powerful fx indicators.  In fact, it is not really an indicator in the classic sense of the word.  Instead, it simply computes the average amount of pips a currency pair has moved over the last X number of periods.  This helps traders gauge how much momentum is left on the day, and how much further a currency pair can be expected to move.

9-EMA

Moving averages are arguably the most common and popular technical indicators of all.  They are not magical indicators that make winning as easy as the click of a button, but they can help gauge market momentum and this is very important for new traders.  Remember the old adage, “The trend is your friend.”  Moving averages help identify the trend in a straightforward manner, and the 9-ema is one particular moving average that helps gauge market momentum.  When price is above the 9-ema, it is bullish, when it is below the 9-ema, it is bearish in forex trading.

Stochastics

Stochastics are also one of the oldest and most popular technical indicators.  Many traders like to use stochastics to identify areas of divergence.  When stochastics show a higher high, but price shows a lower low, then a signal is being given to sell, and vice a versa.  Traders also use stochastics to gauge overbought and oversold areas in order to identify potential reversals.

Bollinger Bands

This indicator was created by a man named John Bollinger, and they are frequently used by traders who scalp ranging markets.  Bollinger bands offer support and resistance areas for prices, but they are often violated in a strong, trending environment.  They tend to perform better in low volatile ranging markets, which makes them a favorite among range scalpers.  NZD USD is one low volatile pair to consider.

These are just a few of the multitude of technical indicators available on MT4.  As stated, however, one of the greatest features of all in MT4 is the ability for a trader to create his own proprietary indicator with MQL4.

Remember, indicators are not a magical secret that unlock endless profits in the forex market.  Whichever indicators you intend to use, make sure you always understand in which market conditions they perform best and in which market conditions they underperform, and then use them accordingly.

Risk Disclaimer: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.