Indicators on MetaTrader are precise mathematical calculations based on a large set of data on any given market pair, such as exchange rates, volume, interest, etc. These indicators help traders visualize relevant information about a market. Based on historical data, indicators provide traders with patterns that the market may likely repeat.
Historical data used by indicators can help traders better navigate the complex and challenging field of trading in various markets. Traders can develop strategies around these indicators, helping them make more informed decisions.
So, what are the indicators provided by MetaTrader that traders can leverage?
Categories of MetaTrader Indicators
On the MetaTrader platform, traders have access to more than 2,000 technical indicators. With this almost endless array of information, traders can find the best indicators that work with their specific strategy. Rather than delve into the 2,000 different indicators, we grouped MetaTrader indicators into five categories.
- Trend Indicators
Almost every trader has at one point heard the phrase: “The trend is your friend.” This category of indicators helps traders spot the general direction (upward or downward) a market is heading and/or tell the trader if a trend already exists. While trends can be used across all timeframes, trend indicators tend to be more accurate when applied to larger time frames. Examples of trend indicators on MetaTrader are:
- Moving Average (MA) averages the price of a currency pair over a certain period of time. By highlighting their general direction, MAs can give traders an idea if the market is trending upwards or downwards. There are several types of MAs, with Simple Moving Averages and Exponential Moving Averages being the most popular. You can also customize MAs on MetaTrader.
- Average Direction Index (ADX) is one of the most used trend indicators. Unlike MA, ADX won’t tell you whether there’s an uptrend or a downtrend. ADX highlights whether the market is trending (in any direction) or consolidating.
- Commodity Channel Index (RSI) can be used in any market to spot long-term trend changes. CCI tracks market movements by comparing the current price to the average price over a specific time period, helping traders find buying and selling opportunities.
- Momentum Indicators
These are some of the most used indicators by traders because they show how fast a particular market is moving and attempts to pinpoint natural turning points. They are often used to determine when the market is overbought or oversold. In an overbought scenario, traders look for reversals and opportunities to sell; in an oversold scenario, traders look for buying opportunities.
- The Relative Strength Index (RSI) is a popular indicator that provides technical traders with signals about bullish and bearish price momentum. By measuring the speed and momentum of an asset’s price against previous overvalued or undervalued conditions, RSI can tell traders when to buy or sell that asset.
- Stochastic Oscillator measures the closing price of an asset to a range of its prices over a certain period of time. Like RSI, it is used to generate overbought and oversold trading signals between the range of zero to one hundred, with the lower values signifying oversold situations.
- Volume Indicators
Using different metrics, these indicators show the amount of an asset that was traded over a specified period of time. In general, these indicators give traders an idea about how other traders perceive the market, whether that be bearish or bullish. By providing hints on price movement, traders can use volume indicators to get early signals into the potential direction of a market. Types of volume indicators are On Balance Volume (OBV), Volume RSI, and volume price trend (VPT), among others.
- Volatility Indicators
This group of indicators highlights the measures of volatility—the periods of high and low volatility—of a given asset. Examples of volatility indicators include Bollinger Bands, Average True Range, and Envelopes. For more volatility indicators, be sure to learn how to connect MetaTrader to TradingView.
- Support and Resistance Indicator
The MetaTrader support and resistance indicator is designed to automatically identify levels with which the asset price previously interacted and display them as rectangular regions on the chart. Under normal circumstances, prices bounce off support zones and don’t reach resistance zones–this can be used by traders to identify buying and selling opportunities.
In Summary
In addition to giving traders over 2,000 indicators, MetaTrader allows for the customization of these indicators for greater accuracy. Trading is all about probabilities, and technical indicators are designed to help traders increase the probability of trades going in their favor.
Looking for further guidance when it comes to all things MetaTrader? Guru has plenty of freelance MetaTrader experts ready to help steer you in the right direction.
