The author is an expert in the field of multi-asset trading.
Trading Using Charts in MetaTrader 4
This article is a continuation in our Introduction to MetaTrader 4 series. If you’ve already read the previous Trading on MetaTrader 4 in 3 Easy Steps article, then you can move on to learning about MT4’s impressive charting functionality below.
What are Charts in MetaTrader 4?
Charts are the most popular tool for traders to make decisions about when to open or close a trade. Follow chart patterns and signals to spot trading opportunities and manage risk effectively. The MetaTrader 4 (MT4) platform has a built-in charting package that helps traders make informed decisions.
Charts can help you make informed market predictions
General charting strategies and technical analysis rest on the assumption that indicators that were important in the past will become important again in the future.
There are three more assumptions that charting/technical analysis rests on:
- The market has three movements, all occurring at the same time – primary, secondary and intraday
- Averages discount everything
- The market reflects all available information
In a way you trade on market sentiment
All factors combined should be reflected in the price level found in the markets. Prices represent the total sum of hopes, fears and expectations of all market participants. Of course, the only way to view the price in this manner is to view it through the charts.
Charting Options in MT4
MetaTrader 4 comprises of a large number of charting options and other technical analysis tools including 30 built-in indicators, over 2000 free custom indicators and 700 paid ones. These allow you to analyse the market of any level of complexity.
MetaTrader 4 also offers 24 analytical objects: lines, channels, the Gann and Fibonacci tools, shapes and arrows. With these tools, you can forecast future price dynamics. Objects can be manually applied both to charts and indicator windows.
You can forecast price direction, detect various trends and set support/resistance levels on the MT4 trading platform.
Unlimited Number of Charts
Each symbol can be displayed in 9 timeframes — from one minute (M1) up to monthly (MN). This allows traders to see the quote dynamics in detail and combine technical indicators and graphical objects on various periods of a single symbol. For example, after building a trend line on the daily period, you will see it on M15 as well, thus being aware of the longer-term trend. This will allow you to assess the current market situation more accurately reducing the influence of the human factor in decision making and turning your Forex trading into a more systematized activity.
You can simultaneously open an unlimited number of charts, customize their appearance and apply various graphical objects and indicators to them. All charts are interactive, and you can zoom and scroll through them in real time.
Use Charts Wisely
Remember, charting doesn't always guarantee success and you should consider these points:
- You do not always have to be in a trade. Sometimes not placing a trade can be the best solution.
- When it comes to charting, complicated does not necessarily mean successful.
You can practice using charts and experimenting with their functionality using a risk-free demo account.
Margined Forex and CFD trading are leveraged products and can result in losses that exceed deposits. The value of your contract can fall as well as rise, which could result in receiving back less than you originally deposited. Please ensure you understand the risks and be sure to manage your risk exposure effectively. Equiti does not provide any investment advice.