There are many forex indicators mt4 in the world, and most of them are profitable. In this article, we will see the top 3 mt4 indicators for the forex market.
Moving Average is the most used trading indicator in the world. Most of the institutional and professional traders use this indicator to identify market sentiment. Moving average represents the average price of the last number of candles where the number of candles is variable.
This MT4 indicator is very easy to plot in the chart, and settings of this indicator are straightforward. When you plot the indicator in the chart, a box will appear where are you can change the value and select the types of moving average. There are many moving average types, but four mostly used moving averages are available as the MT4 indicator.
Among the four types of moving average, the Simple Moving Average (SMA) and Exponential Moving Average (EMA) are very familiar with their reliability. The Simple Moving Average represents the overall market sentiment of the last number of candles, while the Exponential Moving Average focuses on the most recent changes.
The most reliable moving average trading strategy is to use the SMA as a trend identifier and use the EMA to enter the trade.
Moving Average Convergence Divergence (MACD) is a famous forex indicator from the oscillator class. MACD is created based on the concept of the Exponential Moving Average (EMA). In the basic setting of MACD, there is 26 and 12 period of EMA as a histogram. Furthermore, there is another 9 EMA that is known as the signal line.
The main function of the MACD is the histogram, a vertical line that moves below or above the zero levels. The MACD histogram above the zero levels indicates the bullish pressure and below the zero levels indicate the bearish pressure.
Moreover, there is an EMA that moves freely within the histogram. The price can create convergence or divergence with both the EMA and the histogram and create trading signals. Any divergence between the price and the MACD EMA is known as a regular divergence.
On the other hand, a divergence with the price and the histogram is known as a hidden divergence that indicates a minor correction in the price.
RSI is an mt4 indicator from the Oscillator class that is usually used to identify the overbought and the oversold zone.
This mt4 indicator moves within 0 to 100 values. When its value moves above the 70 levels, the currency pair’s price is likely to move down. On the other hand, if its value moves below the 30 levels, the price is likely to reverse towards the upside.
Therefore, if the price shows a bearish rejection from the 30 levels of RSI, it can produce a reliable buy signal. Similarly, we can find sell signals as soon as the price gets rejected from the 70 levels.
Besides the trading idea, we can use RSI as a profit-taking level measuring the price action at an overbought and oversold zone. However, this mt4 indicator’s weakness is that it may provide false reversal trading signals when the price moves within a strong bullish or bearish trend.