When we invest in Forex we need to do a technical analysis of the market before making an investment. The technical analysis is made having in mind the past behavior of a currency pair, whose study allows us to predict quite accurately its behavior in the future.
This analysis has to be really detailed to be precise and therefore we can’t do it manually, instead we need highly specialized computer programs to help us. Metatrader is the most important and the most used of all of these programs for technical analysis.
Its success has been so big that some brokers have found themselves forced to incorporate them to their webs, even when they had developed their own investment programs, seeing that their clients were going to those pages that were compatible with Metatrader, even more after the big success of the 4th version.
Although Metatrader 5 is already available, Metatrader 4 is still the investors’ favorite. This program allows, said as simply as possible, to locate the best moments to invest upward, downward to pull out of an investment, etc.
To make these analysis Metatrader uses the so called indicators which ultimately are mathematical formulas that allow us to get the data we need to predict the movements in prices and, in this way, to know the most appropriate moments to make an investment.
There are hundreds of indicators compatible with Metatrader, especially because this is a highly personal program that lets you incorporate all kinds of formulas. You can find many indicators freely, by downloading them from the brokers’ pages or other investment pages.
There are also payment indicators, but usually these are not a must for individual investors who handle discrete amounts of money in this type of business.
By their properties we can divide indicators in two big groups: tendency indicators and oscillators.
Tendency indicators show us the direction of the price of the pair of currencies, showing us if it’s upward, downward and detecting the moment of the change of tendency, but precisely when this happens. Oscillators allow you to predict when tendency changes are going to happen before hand.
These are the two most important, but there are also other types, for example, in Metatrader 5 the volume change indicators stand out, which show us the number of ticks (changes in the price of the pair) that have happened in a specific period of time.
In this Metatrader version are often mentioned Bill Wilthere liams’ indicators, of the author’s own making, and that are used by many people who follow his methods although they were also included in the previous version.
To have an idea of the big amount of indicators existing we can say that Metatrader 4 includes 30 series indicators, there’s an estimated of 2.000 free indicators available for downloads and about 600 more paid.
These are the 30 series indicators of Metatrader 4, the most used by investors nowadays, and their link to the official page of the program where there’s information of each one of them:
– ADX Indicator
– ATR Indicator
– AO Oscillator
– Bollinger Bands
– CCI Oscillator
– Gator Oscillator
– BW MFI
– Media Mobile
– Standard Deviation
– Stochastic Oscillator
Only Metatrader 5