Boost Your Technical Analysis Skills on MetaTrader 5

MetaTrader 5 is a relatively new addition to the list of advanced platforms used for online financial trading. MT5 is a continuation of MT4 which was and still is a widely popular Forex trading platform. MT5 adds features of its own and offers all capabilities found in MT4 united in a modern design and friendly user interface. Technical analysis on MT5 is conducted using custom indicators and tools which are accessible at any time and enable traders to thoroughly analyze exchange rates for any instrument. Let’s overview the main features of MT5 which can be used to make your technical analysis much more accurate than ever.

Getting Started with MetaTrader 5

To be entirely transparent, MT4 is still more popular than MT5 for FX trading. However, knowing and learning about MT5 can be super useful for traders as the platform is gaining attraction among traders. It is an advanced trading platform software that is also available for mobile devices and in the form of Web Trader. MT5 is mainly used in Forex trading but it also allows commodities (metals, energies, etc.), cryptos (BTC, ETH, etc.), stocks, and other assets.

Key features of MetaTrader 5

MT5 offers advanced charting tools such as a multitude of chart types (candles, lines, bars), timeframes (including custom timeframes), technical indicators, and drawing tools for in-depth analysis. The availability of both built-in and custom timeframes allows traders to analyze markets in multiple timeframes to see what the price is doing in longer timeframes and then compare it to short-term movements. This technique is used to ensure traders only open positions when short-term price movements align with longer-term trends.

Technical indicators

Technical indicators are one of the strongest sides of advanced platforms and MetaTrader 5 offers a plethora of built-in indicators including moving averages, MACD, and much more. The top trading indicators for MT5 can greatly enhance trader’s accuracy and boost profitability. The platform is distinguished by its support for custom indicators allowing traders to develop their own indicators using the advanced programming language MQL5. Surely, it takes lots of knowledge of programming to code your own indicators However, there are thousands of free MT5 indicators available both free and paid ones on the MT5 official store and the web.

Algorithmic trading

MT5 is a powerful platform that also allows you to use algorithmic trading systems, also called Expert Advisors, or EAs. EAs can be used to automate trading tasks or get notifications when certain price action occurs. They can also automate trading strategies without the need for traders to manually control anything.

Customizing Indicators for Better Analysis

One of the benefits of MT5 when compared to other non-professional platforms is to customize indicators by changing periods, adding levels, and so on. It provides traders with powerful tools to analyze price movements and identify potential trading setups. By customizing indicators, traders can better align them with individual trading strategies. Here is how to do it.

Settings and parameters

All indicators in MT5 have adjustable settings that allow traders to adapt them to their trading needs. The main customization options are:

• Periods and timeframes - by adjusting the period of moving averages or oscillators, traders can ensure the indicator readings match short-term or long-term trading styles
• Colors and styles - Changing colors is a nice quality-of-life setting for traders to ensure the indicator is convenient and better visible on charts.
• Alerts and notifications - Setting up alerts is very useful for specific indicator signals to avoid missing trading setups when they occur.

All these features are built-in into MT5, allowing traders to fully customize their trading indicators and experience.

Combining indicators

This is super important in trading! No matter what the accuracy might seem, never use a single indicator for trading. It is always necessary to combine several indicators and price action for better results. By using multiple indicators traders can confirm signals and reduce false signals. Custom indicators can also be used in conjunction with built-in indicators for better results.

For example:

• Moving averages and RSI - Moving average crossover combined with RSI as a confirmation can provide some reliable information about price whereabouts.
• MACD and Bollinger bands - MACD signals within BBands breakouts can indicate strong trends

However, too many indicators on the chart will make it difficult to see what the price is doing and can lead to information overload.

Practical Tips for Improving Technical Analysis Skills

Technical analysis requires time and effort to make it useful in trading and practice makes a difference. Here are some pro tips to enhance your MT5 expertise.

Demo accounts

To use the MT5 platform, traders need to have a demo account. This can be done by registering an account with MetaQuotes (the company responsible for MT5 development) or with a reliable Forex broker. A demo account is absolutely necessary to develop trading strategies and learn MT5 features.

Economic calendar

High-impact economic news such as inflation rates, interest rate decisions, and so on can seriously affect price volatility, and knowing when they are released is a must. To monitor news and avoid trading during high volatility, traders should use economics calendars. These calendars are offered by the majority of brokers and can be found online for free.

Continuous learning

Markets are dynamic in nature and they always shift and evolve. The only way to stay relevant and consistent is to always learn new things and developments. Traders can improve their knowledge by reading books and market analysis reports and engaging with trading communities for insights and shared experiences.

Advanced Techniques for Experienced Traders

Seasoned traders can also enhance their trading skills and improve trade execution.

Algorithmic trading

Since MT5 supports EAs it is a good idea to automate some of the trading tasks at least. EAs can also:

• Fully automate the trading process
• Execute trades much faster than inhuman traders
• Eliminate emotional bias
• Backtesting on historical data is much faster and more convenient
• Automate risk management (stop-loss and take-profit)

Eas can also provide notifications and send alerts via email or SMS, making them super convenient for experienced traders who do not want to stare at the carts all day.

Multi-timeframe analysis

The multi-timeframe analysis involves checking the price action on higher and then lower timeframes. This can help confirm trends and find the best entry points. For example:

• Use a high timeframe (daily, 4 hours, week, etc.) to identify the overall market direction
• User lower timeframes (1 hour, 5 minutes, etc) to find exact entries and exits

Many investors might also employ this technique after fundamental analysis to find the best entries and exits.