This article will provide beginner traders with an explanation of what MT4 buy sell signal indicators are, how to use them to trade on the financial markets, trading tips that you can use on a buy & sell indicator, and a brief list of some of the popular ones used regularly by professional traders.
What are buy and sell indicators for MT4?
MT4 buy sell signal indicators are used to calculate the number of bars that appear on a chart, and the range between them. Through the use of a histogram, an arrow is created which indicates (or signals) whether to buy or sell based on the information presented.
Essentially, it is using older historical data in order to predict where the trend's direction is likely to head in the future.
From this point onwards, traders can then determine the best places to put their stops (stop losses), in order to minimize any losses they could potentially make and to determine the risk margin they are prepared to go for.
Moreover, it provides a basis from which traders can decide if they are going to buy or sell, based on the signals that appear, and the direction of the trend.
Since buy and sell indicators enable traders to operate in any time frame, this makes it possible to apply several different technical trading strategies, such as the multiple time frame analysis strategy.
Rules for buy-sell indicators
These are the key rules that professional traders refer to when using buy and sell indicators with MetaTrader 4:
- Sell arrow = the trader should sell (i.e. a sell signal)
- Upward or buy arrow = the trader should buy (i.e. a buy signal)
- Exit = the trader should exit the trade if the arrow is drastically moving in the opposite direction to their trade (i.e.if it falls below a certain point that the trader is not willing for the trade to fall past)
- Support & Resistance = follows the trade with an arrow and indicates the support or resistance
How to configure the buy sell indicator for MT4
Beginners traders will be pleased to know that there are not many settings required to configure a buy and sell indicator within MetaTrader 4.
All you need to do is to drag and drop the indicator within your chart. The indicator will then react accordingly, providing trading signals in accordance with the different time frames (as you move from one to another).
Since you are able to switch seamlessly between time frames, this makes it easier for traders to move their stops (stop losses) to particular high points or low points on the chart (and this can be performed in real-time - i.e. when the markets are live).
This means that you can minimize your risk even further. However, if you are trading in the Forex markets, it's important to note that this strategy can work against you, as the markets might experience a sudden movement in the opposite direction, meaning that you could potentially lose more capital than you may have originally intended to risk.
With this in mind, it presents the consideration of whether you should rely solely on trading signals and trade only in response to them when they appear (bearing in mind that false signals could appear), or whether you should use the strategy of moving stops in real-time that we outlined above.
Both strategies have their risks and benefits, so it's best to have a trading system or plan that you stick to (which may or may not incorporate these strategies within it). If in doubt, stick to your system, and if it's not working for you, it might be time to revise your strategy.
Different types of buy-sell indicators for MT4
There are many different types of buy and sell indicators for the forex market and other financial markets, here are just a few of them.
Buy Sell Arrow Indicator
- Displays arrows indicating whether to buy or sell.
This is a pretty straightforward and uncomplicated buy sell indicator. When a blue arrow is displayed on the chart, this represents a buy signal to the trader. When a red arrow is displayed, this presents a sell signal.
This indicator reportedly works best when there is a strong trending market, but it does not work as effectively when the market range is tight (as many false signals may appear), thus making it far more difficult to understand which ones to act on, and which ones should be ignored.
Half Trend Buy Sell Indicator
- Creates its own average and indicates according to the initial direction of the trend
This indicator works by referring to moving averages. It provides an average line for the price movement, which it calculates by dividing the open & closes of the price bars with the time periods specified by the trader.
If the average line turns blue, this indicates that the trend of the market is bullish, and if it turns red, this represents a bearish trend.
RSI (Relative Strength Index) Indicator
- Measures trend movement between two extremes and indicates if an investment is overbought or oversold
This is a momentum indicator used by professional traders that prefer technical analysis as an approach to trading. This indicator measures the number of price changes (in terms of magnitude) for the purpose of establishing whether the prices of assets or stocks have been oversold or overbought.
On a chart, the RSI is shown as an oscillator (which is a type of line graph that displays movement between two extremes) and will display a number between 0 to 100 (i.e. the 'strength').
Typically, if the number is 70 or higher, this indicates to traders that the investment or 'security' is becoming, or has become 'overbought' or 'overvalued'. This can lead to a reversal in the trend and/or a price reversal. Conversely, the number 30 or lower can indicate that the investment has become 'oversold' or 'undervalued'.
Practise Using The MetaTrader 4 Buy Sell Indicator
MTrading enables beginner traders to practice using buy and sell indicators for mt4 for free with the use of a demo trading account. Simply set up an account with MTrading and you can begin testing out different MetaTrader 4 buy sell indicators until you decide on the best ones for you and your trading system.
MTrading enables traders to gain access to this free download, so that they can start testing out all of the types of buy and sell indicators for MT4.
What's more, you can gain access to real-time trading information from the financial markets, as well as trade with virtual funds - so that your capital is not at risk while you are learning.
Once you are ready to test your indicators out in the real markets, you can simply transition from your demo account to a live trading account.
Here you can see a full instruction how to add Buy Sell Arrow Indicator to your MT4 for free. Actually, you can use this instruction flow for adding any custom indicator.
- First, download a zip. file.
- Make sure you already have a demo account. If not, open it here in a few clicks.
- Then, extract the file and run the MT4 platform (you can download it for free above).
- When you open MT4, choose File - > Open Data Folder -> MQL4 – Indicators.
- Transfer the Buy Sell Arrow installation file to the folder with indicators.
- Restart the MT4 platform and check if the indicator is available in the Indicators custom section.
You can also watch a video instruction here:
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.