The Best Technical Indicators and Tools in MT5

When comparing MetaTrader 5 to previous versions, there are some notable differences. Technical indicators in MetaTrader are grouped into four categories: oscillators, volume, trend, and Bill Williams. But there is a fifth category, custom indicators, where forex traders can store their own elements. With MT5, accessing indicators is easier and quicker, and most of them are free to use.

The MetaTrader 5 platform offers a wide range of indicators. We will highlight some of the best ones, such as:

• Fractal Adaptive Moving Average (also known as FRAME),
• BB MACD, Market Facilitation Index (or BW MFI),
• Commodity Channel Index (or CCI), 
• MetaTrader Trade Assistant indicator.

Fractal Adaptive Moving Average (also known as FRAME)

In MetaTrader, the Fractal Adaptive Moving Average (FRAMA) indicator is used to adjust the period of homogeneity dynamically based on changing prices over a certain period. 

The theory behind FRAMA is intelligent. This indicator is beneficial because financial markets are fractal, meaning that price movements look similar regardless of the timeframe. 

The fractal dimension, or “D” dimension, is used to determine how the fractal fills space. As it grows on the scale, it stands out more. FRAME determines the fractional dimensions of the price over a period and uses these results to adjust the homogeneity period of the Exponential Moving Average (EMA).

BB MACD

The BB MACD is an indicator that combines the MetaTrader MACD and Bollinger Bands into a single tool.

A change in the MACD’s color (green or magenta dots) is typically a good trading signal, according to technical indicators in MetaTrader.

The signal’s strength is determined by the gap’s width between the blue and red lines. The MACD line serves as the Bollinger Bands’ central line, and it is represented as a dotted line. This line’s range’s typical deviation is calculated by the tool. 

In general, the original MACD setting is useful and enjoyable because it simplifies trading signal interpretation.

Market Facilitation Index (BW MFI) Implementation Details

The Market Facilitation Index (BW MFI) is a technical indicator that shows price changes for a specific market. The absolute values of the indicators are not meaningful as they only indicate change.

When the BW MFI expands and volume increases, this signals that a new trader has entered a position in the direction of the bar’s development, and the movement will continue to increase. This also suggests that the number of players entering the market is growing.

Conversely, when the MT5 indicator decreases, the volume also decreases, indicating that market participants are losing interest. However, smaller financial institutions for white and black have increased significantly despite the volume decline. The market appears unsupported by some clients, and prices will change due to traders’ speculations.

Finally, when the BW MFI decreases but its volume increases, it means there is a fierce battle between bearish and bullish traders. The large buying and selling volumes indicate that one of the conflicting parties will ultimately win the battle, and the breakthrough bar will reveal whether the trend will continue or end.

CCI 

To determine whether to buy or sell, the CCI indicator is used as a representation for MetaTrader 5 Forex. It shows the location of CCI crossing with zero, indicated by a blue or red arrow. This indicator has minimal lag and high accuracy, making it a great option for traders who prefer a simple approach.

For important input parameters, CCI Period (default = 14) is an example. This period is applied to the indicator. The ratio value determines the lag and false signals.

The indicator creates an immediate buy or sell signal. However, it’s essential to avoid trading if the signal conflicts with the current prevailing trend.

If a blue arrow appears in an uptrend, it’s time to buy, while a red arrow indicates closing a long position. In a downtrend, close short positions with blue arrows but avoid taking buy trades. If the chart is moving sideways, and a blue or red arrow appears, consider choosing short or long.

Lastly, it’s wise to set stop-loss at the arrow’s level and use stop orders.

Trading Assistant

The Trade Assistant for MetaTrader is a versatile MT5 indicator that combines three commonly used indicators: RSI, CCI, and Stochastic Oscillator. It displays the current trend direction for six different timeframes – M5, M30, M15, H4, D1, and H1, providing a comprehensive view of the market trend.

The chart timeframe you attach it to does not affect its functionality. However, it is crucial to avoid modifying the input parameters. In terms of buying and selling, it is recommended to only do so if all indicators align in the same direction on your timeframe chart, and as the two timeframes converge.

For instance, if all indicators indicate a buy signal on both the H1 and M15 timeframes, it would be wise to buy a long range on the M30 timeframe. 

The MT5 platform offers many useful trading indicators. You can choose any indicator that suits your needs. 

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