CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.00% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Custom indicators help identify the trend, momentum, volatility, or support/resistance levels, and play a key role in making sound trading decisions. In June 2021, MetaTrader 5 surpassed MetaTrader 4 to become the most popular trading platform. If you’re using MT5, you already have access to a vast library of indicators to choose from. Here’s everything you need to know on how to use indicators on your MT5 charts.
Choosing the correct indicator can be tricky. Start by checking trader communities and learn as much as you can about the indicators to choose what fits your trading strategy and style the best. You can check online reviews to verify that they do not fail under certain market conditions or when used with other indicators. You may wish to avoid hard-coded indicators as they fail with changing market conditions.
There are both free and paid custom indicators. Among the paid ones, there are one-time payment and subscription based indicators. Some involve a smaller one-time payment and levy a fee for updates. Make your decision based on your trading strategy first, and then the budget.
Here are the steps to download, install and test a custom indicator on MT5.
There are two ways of downloading a chosen indicator:
Directly from the Terminal
From the MT5 Website
If you know how to code, you can build your custom indicator. To do that, you’ll need to learn MQL5 (the MT5 programming language). You can even connect with the coding community to clarify any doubts. Whether you’ve downloaded the .mql5 file from the MT5 Marketplace or created your own file, you’ll need to follow the same steps to install the indicator on the terminal.
You can also open both folders simultaneously and drag and drop the files. As soon as the files are copied, their extension will change to .exe.
You can refresh or close and reopen the MT5 terminal to set up the indicators.
Once you reopen the terminal, your indicators are ready to be used.
Deleting an indicator is highly intuitive on MetaTrader5.
Alternately, open the Context Menu, select the indicator from the list and click Delete. This will permanently remove the indicator from the chart.
Trading indicators are designed by coders. Some developers create them with their level of trading expertise, while others are paid by experts to customise as per their strategy. In both cases, it is important to know how well the indicator fits your trading plan. You can do this with thorough backtesting.
You can backtest the indicator with any price chart from the History section or with your own prepared test sets. Run the indicator and track its performance. Some indicators have customisable parameters that you can adjust, to match your requirements. If the indicator fails to work in the desired way, you can try another indicator.
Make sure that you backtest across a wide dataset involving ranging and trending markets, with high and low liquidity and momentum. This will help you identify their shortcomings. It’s a good idea to use more than one indicator, to confirm the identified signals.
Strategically chosen indicators that give primary and confirmation signals are a powerful tool to enhance your trading experience. When combining more than two indicators, make sure they do not give redundant information, as you will be unnecessarily burdening the processor, which will impact speed. More is not always better, as this will also make it more confusing when making trading decisions in the often fast-moving financial markets.
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