A huge part of the success of a trader is due to technical analysis. TA minimizes risks by giving a trader an idea of when it is best to enter and exit. However, because of the difficulty of technical indicators that comes with TA, most beginners who want to trade forex tend to ignore the importance of these tools. Fortunately, the MT4 trading platform comes with very easy and user-friendly tools for technical analysis.
Here are some of the MT4 Indicators for New Traders:
Moving Average Convergence Divergence Indicator
MACD is one of the best MT4 indicators that a beginner should know. This indicator shows the relationship of averages between 2 prices. If there is a sudden rise in price, it shows a short-term average to pull away from the long-term average. In cooperation with the signal line, this indicator shows when to buy or sell. A sell signal occurs when the MACD falls below the signal line and when it falls above the signal line, it indicates a good time to buy. This indicator uses the formula of divergence to show the end of the current market.
Order History Indicator
This indicator shows your previous trade transactions. This gives helps by giving you an idea of when to re-enter and replicate your previous success. It may also show opportunities that you have missed. MT4 also has a feature to easily share your result on social media via their sharing tools.
This indicator has 3 lines which are Moving Averages. The middle band depicts the market trend, whereas the upper and lower bands vary by volatility above or below the middle line. The indicator encloses the currency/security price between the outer lines to project these discrepancies. As a result, the price moves around the centerline on a regular basis, forcing the outer lines to move closer or farther apart. The greater the spread between the two lines, the greater the market volatility.
The indicator also displays overbought currency pairs based on these moves. This occurs as the price approaches the upper band. If the price falls below the bottom range, it indicates a purchasing opportunity.
This indicator shows the negative and positive flow of a trading volume. The flow is achieved by deducting or adding the trade volume of a certain trading day while considering the movement of the price. A bull signal happens when the currency in OBV is increasing and a bear market signal occurs when the OBV decreases.
Indicator of stochasticity This compares a currency pair’s closing price to a range of its prices over a certain time period. Traders can detect overbought and oversold currency pairs using this comparison. During an upswing, prices remain equal to or exceed the preceding period’s closing price. Prices, on the other hand, will fall below or remain constant with the prior closing price. To convey these signs, the indicator employs a scale to assess differences between closing periods, thereby projecting the current trend direction.
Due to its simplicity, this is one of the most missed indications. Despite its simplicity, the zigzag indicator is an important technical analysis tool for connecting highs and lows. This aids in the identification of trends as well as resistances and supports.
The highs and lows are determined by buying and selling, which is why the zigzag indicator has a high degree of flexibility, allowing it to detect even minor market trends. Similarly, by recognizing highs, the indicator shows horizontal resistance while identifying lows as horizontal supports.
MT4 is a popular trading platform that is used to trade forex. It is perfect for both experienced and inexperienced traders. To get the most out of this trading platform, consider employing the tools described above in your next trade.