MT4 Indicator Guide: Types, Uses & Tips

1. Introduction

What is MT4?

MT4 (MetaTrader 4) is a trading platform developed for FX trading and CFD transactions. It is widely used by traders worldwide, and its hallmark is the abundance of indicators for technical analysis. Additionally, it offers flexibility to create original indicators and automated trading programs (EAs) using the programming language MQL4.

The Role and Importance of Indicators

Indicators are tools that analyze market trends and directions based on past price data. By using them, traders can pinpoint trade timing and enhance the precision of their trades.

Indicators come in the following types.

• Trend indicators (e.g., moving averages, Bollinger Bands)
• Oscillator indicators (e.g., RSI, MACD)
• Volume indicators (e.g., volume, OBV)

By selecting appropriate indicators and using them according to market conditions, you can achieve more effective trading.

What You’ll Learn in This Article

This article provides a detailed explanation of everything from the basics of MT4 indicators to their practical use. It addresses questions that beginners to intermediate traders may have, including the following.

• Types and usage of indicators that come standard with MT4
• How to install and configure custom indicators
• Recommended indicators and usage by purpose
• Trading strategies using indicators

By reading this article, you’ll learn how to use MT4 indicators more effectively and find a way to use them that fits your trading style.

2. Basics of MT4 Indicators

List of Standard Indicators

MT4 comes with the following three main categories of indicators pre-installed.

Trend Indicators

These indicators help you understand the direction of the trend. They determine whether the market is in an uptrend or downtrend and are used as signals for trend-following trades.

• Moving Average (MA: Moving Average)
• Calculates the average price and indicates the direction of the trend.
• Short-term (5, 10 days), mid-term (25 days), long-term (50, 100 days), etc., can be tailored for different purposes depending on the settings.
• Bollinger Bands (Bollinger Bands)
• Shows the price volatility and helps gauge the strength of the trend.
• When the price approaches the upper or lower band, it can indicate a potential reversal.
• Ichimoku Kinko Hyo (Ichimoku Kinko Hyo)
• A Japanese-origin indicator that visually displays market trends, support, and resistance.

Oscillator Indicators

These indicators determine whether the market is overbought or oversold, aiding in contrarian trades.

• RSI (Relative Strength Index)
• Measures market overheating on a scale from 0 to 100.
• Typically, values above 70 indicate overbought conditions, while below 30 suggest oversold.
• MACD (Moving Average Convergence Divergence)
• Analyzes the convergence and divergence of two moving averages to suggest trend reversals.
• A golden cross signals a buy, while a dead cross signals a sell.
• Stochastic Oscillator (Stochastic Oscillator)
• Measures the current price relative to the high and low over a specified period.

Volume Indicators

These indicators analyze trading volume to gauge market momentum.

• Volume (Volume)
• Displays the trading volume of market participants and serves as a metric for trend strength.
• OBV (On Balance Volume)
• Analyzes the relationship between price and volume to predict trend continuation or reversal.

Types and Features of Indicators

MT4 indicators can be broadly divided into the following three types.

1. Trend-Following Type (Trend-Following)

Indicators designed to trade in line with market trends.
Examples: Moving Average (MA), Bollinger Bands, Ichimoku Kinko Hyo

• Pros: Easy to ride large trends, high win rate.
• Cons: Prone to whipsaws in range-bound markets.

2. Contrarian Type (Range-Trade)

Determine overbought/oversold conditions and target reversal points.
Examples: RSI, Stochastic Oscillator

• Pros: High-probability entries in range markets.
• Cons: Can incur losses when a strong trend emerges.

3. Volume Analysis Type

Analyze trading volume to measure market momentum.
Examples: Volume, OBV (On Balance Volume)

• Pros: Confirms trend strength.
• Cons: Requires analysis alongside price movement.

Summary

MT4 comes equipped with many standard indicators, each with its own characteristics and uses.

• Trend-Following Type (Moving Average, Bollinger Bands) → Enables trading that rides the trend.
• Contrarian Type (RSI, Stochastic Oscillator) → Identifies entry points in range markets.
• Volume Analysis Type (Volume, OBV) → Helps determine the strength of the trend.

Understanding these indicators and selecting the ones that fit your trading style is essential.

3. How to Install Custom Indicators

MT4 comes with a wealth of standard indicators, but if you want to perform more advanced analysis, installing custom indicators is recommended. Using custom indicators allows you to conduct more detailed analysis and execute your own trading strategies.

This section provides a detailed explanation from an overview of custom indicators to installation steps, configuration methods, and troubleshooting.

3-1. What is a Custom Indicator?

A custom indicator is an indicator that has its own logic not found in standard indicators. In MT4, it is created using the MQL4 programming language, and traders worldwide develop and publish them.

Features of Custom Indicators

• High flexibility: Allows use of indicators that incorporate original analysis methods.
• Versatile uses: Can be used for a wide range of purposes such as providing entry signals, performing custom trend analysis, and automatically drawing support/resistance lines.
• Can be downloaded externally: Distributed on the MQL5 official site, various FX forums, and developers’ sites.

Free vs Paid Indicators

Item	Free Indicator	Paid Indicator
Price	Free	Several thousand yen to tens of thousands of yen
Reliability	Mixed quality	Many are high quality
Support	None (self-responsibility)	Support from developers
Features	Mostly basic features	Advanced analysis features with alerts

For beginners, free indicators are sufficient, but if you want to perform advanced analysis that matches your trading strategy, it may be worth considering paid indicators.

3-2. Installation Steps for Custom Indicators

Installing custom indicators is simple and can be done in a few steps. Follow the steps below to install.

Step 1: Download the Indicator

First, download the custom indicator file (.mq4 or .ex4) from a trusted site.

Recommended download sources

• MQL5 official site (https://www.mql5.com/ja/market/mt4/indicator)
• Developer’s official site

Points to note

• Download from a trusted site (to avoid malicious code).
• Obtain a file in .mq4 (with source code) or .ex4 (compiled) format.

Step 2: Save to MT4’s Indicator Folder

1. Open MT4.
2. Click the menu bar’s “File” → “Open Data Folder”.
3. Open the “Indicators” folder inside the “MQL4” folder.
4. Copy the downloaded .mq4 or .ex4 file into the “Indicators” folder.

Step 3: Restart MT4

To ensure MT4 correctly recognizes the custom indicator, close and restart MT4.

Step 4: Apply the Indicator from the Navigator

1. Open the MT4 “Navigator” window (Ctrl + N).
2. The newly added indicator will appear in the “Indicators” list.
3. Drag and drop the indicator onto the chart.

Step 5: Set Parameters

Customize the indicator’s parameters and optimize them to fit your trading style.

• Change numeric values and colors
• Set alerts (sound or notifications)
• Specify the timeframes to display

3-3. Troubleshooting

When a custom indicator is installed but does not work properly, here are some solutions.

1. Indicator Not Displaying

✅ Solution

• Restart MT4 (it will be recognized after reloading).
• Check that the indicator is recognized in the “Navigator” window.
• Check the “Allow DLL imports” option

1. Open “Parameter Settings” when applying the indicator.
2. In the “General” tab, check “Allow DLL imports”.

2. Indicator Displays an Error Message

✅ Solution

• Check the error message and, if necessary, modify the MQL4 code.
• Check the error details in the Journal tab (within the terminal window).
• If it’s a .mq4 file, recompile it in MT4’s MetaEditor.

3. Indicator Is Slow or Freezes

✅ Solution

• Do not use multiple custom indicators simultaneously (it can cause high load).
• Check your PC’s specs and reduce memory usage.
• Adjust the “Maximum history data” (Tools → Options → Charts).

Summary

Custom indicators enable advanced analysis not available in MT4’s standard indicators and help improve trading accuracy.
When installing, it is important to download from a trusted site and install following the correct procedure.

Also, if an indicator does not work properly, perform appropriate troubleshooting such as restarting MT4 and checking the “Allow DLL imports” setting.

4. Recommended MT4 Indicators

MT4 comes with many built-in indicators, but more traders are adopting custom indicators for advanced analysis. In this section, we introduce free indicators, the pros and cons of paid indicators, and recommended indicators by purpose.

4-1. Recommended Free MT4 Indicators

Free indicators are attractive because they enhance MT4’s analytical capabilities without cost. Below are particularly popular free indicators.

① Moving Average（Moving Average Line）

• Purpose: Understand the trend direction
• Features：
• Short-term (5SMA, 10EMA), medium-term (25SMA, 50EMA), long-term (200SMA), etc., can be set according to trading style
• Ideal for trend-following strategies

② Bollinger Bands（Bollinger Band）

• Purpose: Measure market volatility (price range)
• Features：
• Upper and lower bands indicate market overheating
• If price approaches the upper band, consider selling; if it approaches the lower band, consider buying

③ RSI（Relative Strength Index）

• Purpose: Determine overbought and oversold conditions
• Features：
• RSI above 70 indicates overbought; below 30 indicates oversold
• Suitable for contrarian trading

④ MACD（Moving Average Convergence Divergence）

• Purpose: Identify trend reversal signals
• Features：
• Golden cross (short-term line crosses above long-term line) signals a buy
• Dead cross (short-term line crosses below long-term line) signals a sell

⑤ Stochastic Oscillator（Stochastic）

• Purpose: Find short-term market turning points
• Features：
• Above 80 indicates overbought; below 20 indicates oversold
• Combining with RSI can yield more accurate entries

⑥ AutoTrendLines（Automatically draws trend lines）

4-2. Pros and Cons of Paid Indicators

Paid indicators often provide advanced features and proprietary analysis methods not found in free versions. However, some can be expensive, so careful selection is necessary.

Item	Free Indicator	Paid Indicator
Cost	¥0	a few thousand to tens of thousands of yen
Customizability	Limited	Advanced settings available
Support	None (self-responsibility)	Developer support available
Accuracy	Simple logic	More accurate with complex algorithms

Examples of Paid Indicators

• Forex Gump (trend-following, beginner-friendly)
• Supply and Demand Indicator (automatically displays support and resistance lines)

When purchasing paid indicators, it’s important to check whether there is a free trial and if a refund guarantee exists.

4-3. Recommended Indicators by Purpose

The optimal indicator varies by trader style. Here we introduce the best indicators for each purpose.

① For Trend Following

✅ Moving Average (MA)
✅ MACD
✅ Ichimoku Kinko Hyo (One-Price Balance Chart)

• Features: Confirms trend formation and is suitable for trend-following trades
• Recommended Use：
• Combine 50SMA with MACD to determine trend reversal timing

② For Contrarian Trading

✅ RSI (Relative Strength Index)
✅ Stochastic
✅ Bollinger Bands

• Features: Enter when the market is overbought or oversold
• Recommended Use：
• RSI ≤ 30 + touch lower Bollinger Band → Buy
• RSI ≥ 70 + touch upper Bollinger Band → Sell

③ For Volume Analysis

✅ OBV (On Balance Volume)
✅ Accumulation/Distribution (A/D Line)
✅ Volume Profile

• Features: Uses volume to assess trend continuity
• Recommended Use：
• Price rises but volume does not increase → indicates weakening trend

4-4. How to Choose User-Friendly Indicators

With so many indicator types, many may wonder which to choose. The key points when selecting are as follows.

Point 1: Choose simple and easy-to-understand indicators

• Beginners should first use basic indicators such as Moving Averages (MA) and RSI
• Using too many indicators can make analysis overly complex

Point 2: Choose indicators that match your trading style

• Scalping (short-term trading): Stochastic, RSI, Bollinger Bands
• Swing trading (medium to long-term): Moving Averages, MACD, Ichimoku Kinko Hyo

Point 3: Test with backtesting

• MT4 has a feature called Strategy Tester that allows you to test indicator performance on historical data
• Testing on a demo account before live trading is safest

Summary

• Free indicators can provide sufficient analysis (especially MA, RSI, MACD are essential)
• Paid indicators are high-functioning but careful selection is essential
• Select the optimal indicator based on your trading style
• Avoid overuse and focus on simple combinations
• Validate with backtesting and demo accounts before implementation

5. Key Points for Using Indicators

By effectively using MT4 indicators, you can improve the accuracy of your trades. However, using indicators alone is often insufficient, and appropriate combinations and adjustments based on market conditions are necessary.

In this section, we will explain in detail the correct way to use indicators and key points for their application.

5-1. Combining Multiple Indicators

Indicators analyze the market using different calculation methods and perspectives, so combining multiple indicators allows for more accurate judgments.

Recommended Combinations

① Moving Averages (MA) + MACD

• Purpose: Determine trend formation and reversal
• How to Use:
• Use 50SMA and 200SMA to confirm long-term trends
• Enter when the MACD creates a golden cross
• Conversely, consider selling when a dead cross occurs

✅ Benefits

• Can confirm trend direction while using MACD to determine entry timing.

② RSI + Bollinger Bands

• Purpose: Contrarian entries in range-bound markets
• How to Use:
• Consider RSI below 30 as oversold and above 70 as overbought
• Buy when price touches the lower Bollinger Band and RSI is below 30
• Sell when price touches the upper Bollinger Band and RSI is above 70

✅ Benefits

• Effective for contrarian strategies when the market is overheated.
• Provides double confirmation for entry rationale.

③ Exponential Moving Averages (EMA) + Stochastics

• Purpose: Entry decisions for short-term trading (scalping)
• How to Use:
• Use short-term EMAs (9EMA, 21EMA) to grasp trend direction
• When Stochastics are below 20 and the EMA is upward, consider buying
• When Stochastics are above 80 and the EMA is downward, consider selling

✅ Benefits

• Strategies for scalping and short-term trading.
• Facilitates entry when market momentum weakens.

5-2. Avoid Overconfidence and Adjust According to Market Conditions

Indicators are merely “market support tools” and not absolute indicators. Relying too heavily on indicator signals can lead to incorrect judgments.

Points to Avoid Overconfidence in Indicators

✅ Understand the market environment

• Trend markets (clear uptrends or downtrends) are best suited for trend indicators like Moving Averages + MACD.
• Range-bound markets (sideways movement) benefit from contrarian indicators such as RSI + Bollinger Bands.

✅ When a signal appears, also check other factors

• When an indicator signal occurs, consider support/resistance lines and news impact in your decision.

✅ Validate using historical data

• Determining which indicators fit the market requires reviewing past charts for validation.

5-3. Utilizing Backtesting

Backtesting is a method of validating indicator effectiveness using historical data.
MT4 has a feature called the Strategy Tester that allows you to review past indicator performance.

Backtesting Procedure

1. Open MT4 and select Strategy Tester from the View menu
2. Select the indicator you want to test
3. Set the target currency pair and timeframe (e.g., 1-hour, 4-hour charts)
4. Press Start to run the simulation
5. Review results and identify optimal parameters

Key Points to Verify in Backtesting

✅ Signal frequency and accuracy

• Frequent signals can lead to many false positives.
• Check whether entry timing is appropriate.

✅ Does it work in past market environments?

• Test in both trend and range markets to determine where it is effective.

✅ Parameter adjustments

• Do not use default settings; instead, find optimal values through backtesting.

Summary

• Indicators should not be used alone; combining them improves accuracy.
• Properly combining trend and contrarian indicators yields more effective entries.
• Use different indicators based on market conditions (trend vs. range).
• Do not rely solely on indicator signals; also consider support/resistance and fundamentals.
• Backtesting is essential to find optimal settings.

6. FAQ (Frequently Asked Questions)

When you start using MT4 indicators, many traders have questions. This section summarizes common questions and answers.

6-1. Will adding too many indicators make MT4 slow?

Yes, it is possible.
MT4 is a relatively lightweight trading platform, but applying many indicators simultaneously can slow down processing and make chart performance sluggish.

Solutions

✅ Remove unnecessary indicators

• Delete indicators you are not using and keep only the ones you need.

✅ Adjust the update frequency of indicators

• Indicators that calculate at high frequency (e.g., complex custom indicators) can reduce load by adjusting the update interval.

✅ Check your PC specs and upgrade if necessary

• Adding more memory (RAM) will make MT4 run more smoothly.

6-2. What to do if a custom indicator does not work correctly?

If you added a custom indicator but it does not display or shows an error, the following causes may be responsible.

Causes and Solutions

✅ Restart MT4

• After applying the indicator, restarting MT4 once may cause it to be recognized.

✅ Check ‘Allow DLL usage’

1. Right-click the indicator in MT4’s Navigator and open ‘Parameters’.
2. In the ‘General’ tab, check ‘Allow DLL usage’.

✅ Verify that the indicator file is in the correct folder

1. Go to File → Open Data Folder → MQL4 → Indicators and confirm that the .mq4 or .ex4 file is present.
2. If it’s not in the correct folder, move it to the appropriate location.

✅ Check the error message

• Check the errors displayed in the Terminal window’s ‘Experts’ tab and look for solutions.

6-3. Which indicators increase win rate?

Indicators are merely trade support tools and cannot guarantee a 100% win rate. However, with the right combination and strategy, you can improve your win rate.

Recommended combinations

✅ Trend markets (trend following)

• Moving Average (50 SMA) + MACD
  → Confirm the trend direction and enter a buy on the MACD golden cross.

✅ Range markets (counter-trend)

• RSI + Bollinger Bands
  → Buy when RSI is below 30 and price is at the lower Bollinger Band; sell when RSI is above 70 and price is at the upper Bollinger Band.

✅ Short-term trading (scalping)

• Stochastics + 9 EMA (short-term moving average)
  → Buy when Stochastics are oversold and the moving average is trending upward.

6-4. Which indicator should you choose: free or paid?

✅ Free indicators are ideal for beginners and sufficient for basic analysis. In particular, standard indicators such as moving averages, RSI, MACD, Bollinger Bands are used by almost all traders.

✅ Paid indicators are for intermediate and advanced traders who perform advanced analysis. The benefits of paid indicators include more accurate signals, alert features, and automatic trend line display, among other convenient functions.

Conclusion:

• Beginners should first learn with free indicators and consider paid versions if needed.

6-5. Things to keep in mind when using indicators

Over-relying on indicators can lead to incorrect trading decisions.
Keep these points in mind when using indicators.

✅ Do not rely on a single indicator

• Indicators should be used in combination.
• For example, don’t base entries solely on RSI; combine it with Bollinger Bands or moving averages.

✅ Always be aware of market conditions

• Determine whether the market is trending or ranging and choose appropriate indicators.

✅ Backtest and validate your strategy

• Use the Strategy Tester to confirm the effectiveness of indicators on historical data.

✅ Avoid emotional trading

• Even when following indicator signals, maintain calm judgment.

Summary

• Using too many indicators can slow down MT4, so keep it to a minimum.
• If a custom indicator doesn’t work, check ‘Allow DLL’ and verify the folder.
• Which indicators increase win rate depends on your trading style.
• Free indicators provide sufficient analysis; intermediate and above should consider paid versions.
• Do not over-trust indicator signals; use them according to market conditions.

7. Summary

In this article, we have provided a detailed explanation covering the basics of MT4 indicators, how to implement them, key usage points, recommended indicators, and frequently asked questions. Here, we recap the important points and summarize advice for effectively mastering the use of indicators.

7-1. Understand the Basics of MT4 Indicators

✅ There are three main types of standard indicators

1. Trend indicators (moving averages, Bollinger Bands, Ichimoku Kinko Hyo)

• Used to capture market flow
• Ideal for trend-following trades

1. Oscillator indicators (RSI, MACD, Stochastics)

• Determine overbought/oversold conditions
• Suitable for contrarian trades

1. Volume indicators (volume, OBV)

• Measure market momentum
• Help confirm trend strength

✅ Using custom indicators expands your analytical possibilities

• Free and paid indicators can be obtained from MQL5 and FX-related forums
• Place them in MT4’s “Indicators” folder and adjust settings
• If they don’t work, check DLL permissions and folder paths

7-2. Effective Ways to Use Indicators

✅ Indicators should be used in combination rather than alone

• 50 SMA + MACD → for trending markets
• RSI + Bollinger Bands → for contrarian trades
• Stochastics + 9 EMA → for scalping

✅ Choose indicators based on market conditions

• Trend indicators are effective in trending markets
• Oscillators shine in range-bound markets
• Checking for increasing volume helps assess trend continuity

✅ Use backtesting to verify indicator effectiveness

• Use MT4’s Strategy Tester to validate indicators against historical data
• Adjust parameters to find settings that fit your trading style

7-3. Precautions When Using Indicators

✅ Don’t rely too heavily on indicators

• Indicators are tools for analyzing market trends, not predictors of future prices
• Consider fundamentals and news to understand market movements

✅ Avoid emotional trading

• Don’t jump into a trade just because an indicator signals; also check other factors (support/resistance lines, volume, etc.)

✅ Keep a trading log and continue learning

• Record which indicators worked and which settings were effective, and keep improving
• Practice in a demo account to minimize risk in live trading

7-4. Find Indicators That Suit You and Keep Learning

✅ For beginners

• Start by testing standard indicators and learning basic analysis techniques
• Begin by mastering the use of moving averages, RSI, and MACD

✅ For intermediate and advanced traders

• Use custom indicators to strengthen your trading approach
• Backtest to confirm indicator effectiveness
• Consider developing your own indicators (learning MQL4)

✅ Ultimately, aim to

• Master indicators to reduce unnecessary entries and improve win rate
• Be able to choose appropriate analysis methods based on market conditions
• Leverage indicator knowledge to establish your own trading rules

7-5. Summary of This Article

📌 MT4’s standard indicators include three types: trend, oscillator, and volume.
📌 By incorporating custom indicators, you can perform more advanced analysis.
📌 Using indicators in combination improves entry accuracy.
📌 Backtesting is essential to find optimal indicator settings.
📌 Do not over-rely on indicators; also consider market conditions and fundamentals.

Conclusion

By using MT4 indicators appropriately, you can improve trading accuracy and aim for more stable profits. However, no indicator is all‑purpose; proper application based on usage and market conditions is essential.

Mastering indicators equals higher win rates is not the key; instead, understanding and appropriately using indicators to achieve more favorable trades is the success factor.

Use this article as a reference to find the indicators that suit you and apply them in practice.

Reference Sites