Both beginners and experienced traders can profit from using technical indicators. These guides will explain how seven technical indicators from MetaTrader can be used to enhance your strategy.
What are technical indicators in trading?
Technical indicators are mathematical patterns which are obtained from historical data. They’re used by investors and technical traders to predict future trends and can help to improve intra day trading. Each technical indicator uses a mathematical formula to derive data points, which help traders to make decisions about when they should open or close their positions.
There are two categories of technical indicators. These are oscillators and trend indicators. Each of these categories has a different function. Oscillators swing back and forth between a high maximum and low minimum, so they focus on the momentum of the market. Trend indicators provide an idea of the movement of the trend, so a trader can determine the price direction.
In MetaTrader, you can impose any technical indicator into the chart by dragging it from the Navigator window. Choose your indicator by clicking the Charts toolbar or by executing Insert Indicator from the menu. Technical indicators are usually shown graphically and you can draw them in a separate window with a vertical scale such as MACD.
Since technical indicators are used for trading decisions, it’s often helpful to combine them with price charts such as the Moving Average. You can draw indicators for price data and their derivatives, including Weighted Close, Median Price and Typical Price. You can also use technical indicators to deterineothe indicators, such as the Moving Average for the Awesome Oscillator (AO).
To do this you would draw the Awesome Oscillator, then drag the Moving Average onto the AO graph. Select previous Indicator Data and click Apply To, in order to use the same data that was used to draw the AO chart. If you use the First Indicator Option instead, the data from the very first imposed indicator will be utilized.
You can adjust all of your charts to make them easier to read. For example, the color, thickness and other features of the lines can be changed. Unde the Visualization tab, changes can be made to show the preferred time frame of each indicator. T change any setting, choose your indicator from the Indicators List and click Edit or Properties.
To remove an indicator, click Delete Indicator under the menu or click the Delete Indicator Window. Moving your indicator near a point on the indicator histogram,will give you its precise value at that point.