At XM, you can download and display and use a wide variety of chart indicators in FX, although the number varies depending on MT4 and MT5 (Metatrader). Therefore, a variety of indicators can be used depending on the trader’s preference, but care must be taken. This is because there are many traders who become indicator maniacs and neglect the important trade.
Is an indicator necessary for FX trading?
An indicator is a technical indicator that can be displayed on the chart installed in MT4/MT5. Many people use moving averages, Bollinger bands, Ichimoku Kinko Hyo, etc.
Some traders say that there is no need for indicators in FX, but they say that they are necessary to predict price rises and falls. Most traders use MetaTrader from MetaQuotes. It is free to install and download, and has many original features. Automated trading (EA) can also be used.
Indicators that can be used with MT4/MT5
The types of indicators that can be used are updated daily, and there are currently a wide variety of indicators available, making them popular. It has a wide range of basic services and dedicated functions, and can be easily operated by dragging them in the window. Even new users can use it right away depending on the situation. Trend lines can also be easily drawn.
| kinds | MT4 | MT5 |
| trendy | 7 | 13 |
| oscillator system | 13 | 15 |
| Volume system | 4 | 4 |
| Bill Williams system | 6 | 6 |
| Other indicators | 23 | 59 |
| Total number of indicators | 53 | 97 |
Even though it is installed by default, there are so many of them, so it is convenient because it makes it easy to analyze according to your trading style. It’s the most powerful tool that even famous investors use, so let’s try it out for free. You can also place limit and stop orders at low and high prices.
trendy
As the name suggests, it is an indicator that helps you analyze the current trend. In addition to knowing whether it is an uptrend or a downtrend, it is also possible to analyze how strong the trend is.
Popular trend indicators include moving averages, Bollinger bands.
oscillator system
Oscillator means swing width in Japanese, and in Forex, it is a technical indicator that indicates overbought or oversold.
Stochastics and RSI are the most popular ones.
Volume system
Volume indicators are indicators that show the trading volume and trading amount of the market, and are useful for discovering markets that are likely to generate profits.
It also incorporates how many traders are currently participating in the trade, so it is possible to predict the market price compared to the trading volume.
Bill Williams system
Developed by Bill Williams in 1966, it is a major feature that it reacts hypersensitively to small price movements and gives signs before the rate. It seems that it is supported not only by FX but also by binary option traders.
What you can use in XM trading
As mentioned above, there are many indicators, but the ones that can be used in trading are actually quite limited. I will introduce a simple one that even beginners can use immediately.
moving average
The moving average line is a major indicator that every trader knows. Open the chart you want to draw a moving average line from MT4/MT5 and select the navigator from the display.
When you open the navigator, a menu will appear, so display the trend from the indicator and finally double-click on Moving Average.
You can set 3 settings by clicking.
Display period
Fundamentally, they are classified into three patterns: short-term, medium-term, and long-term.
| short term moving average | Within 1 month such as 5・7・10・14・25 |
| medium term moving average | 2 to 3 months such as 50/75 |
| long term moving average | More than half a year, such as 100/200 |
types of moving averages
There are four types of moving averages.
| SMA simple moving average | Most popular. A line that averages closing prices for a specified period. You can judge the trend direction without being affected even during periods of intense price movement. |
| EMA Exponential Moving Average | Most used. Double the last price, sum and divide by the period Since it is affected by the latest price, it is possible to confirm the trend reversal early. |
| SMMA smooth moving average | A more sophisticated version of the EMA Exponential Moving Average movement is slow |
| LWMA Linear Weighted Moving Average | The most recent value times the maximum percentage. Calculated by decreasing the percentage each time the target period goes back. |
Style: line color
Set this to your liking.
bollinger bands
Bollinger Bands are used to analyze market trends. It is clearly formed on the chart, so even beginners should be able to read it. It’s pretty important information, so let’s master it early.
When you open the navigator, a menu will appear, so display the trend from the indicator and finally double-click on Bolinger Bands.
When Bollinger Bands are attached, lines are drawn on the upper and lower limits of the chart, and a line is also drawn in the middle.。
When the upper and lower limits of the Bollinger Bands are narrow, it indicates a low trading volume. And when trading volume increases and a trend forms, the chart will stick to the upper or lower line of the Bollinger Bands. This state becomes a trend. Bollinger Bands is a tool that can detect the state of the trend.
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