Top 5 MT4 Trading Tools

Trading Tools

What are the Top 5 MT4 trading tools?

For most traders, the sheer amount of trading information available online can seem quite daunting.  But don’t fear! We are here to guide you through some of the most useful and helpful trading tools available on your MT4 platform.

To thrive as trader in any market (let alone FX – the largest market in the world) you will need to learn some basic trading strategies, learn how some trading indicators work and more importantly – how to use them!

Technical analysis is one of the most sought after and useful tools a trader can have in the current market climate. Technical analysis will help you predict price movements, changes in momentum, show areas of support and resistance and a lot lot more!

It’s worth noting that technical analysis is more often used as a short to mid term trading tool. Fundamental analysis (such as the analysis of GDP numbers and Central Bank Interest rate Decisions) is used more for longer term trading.

Enough small talk! Please read on, to learn more about our Top 5 MT4 trading tools on your MT4 platform and when you’re ready – Click here to open your account today.

1 – Trendlines. 

Number one in our top 5 MT4 trading tools list is Trendlines. Trendlines are the most commonly used and most important trading tools available today. Everyone from first time traders to the most experienced hedge fund managers use them. Trendlines are drawn on to charts by clicking and dragging to connect price movement points. The resulting trendline aids the trader by giving them an idea of which direction the market is moving and may move in the future.

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Support Trend-Line

The two main indicators traders will look for are points of support (where the market should hold above) and points of resistance (where the market should hold below). These 2 areas can be the foundations for a trade idea. For example, buying in front of the support and selling in front of the resistance.

top 5 mt4 trading
Resistance Trend-line

More than 1 trendline can also be placed onto a single chart on MT4. When adding a support trendline and a resistance trendline together. You have created a trading ‘Channel’.

A famous saying used by traders for many years – ‘The Trend is your friend’. Trendlines show which way the market is trending so you can see the relevance here.

It is worth noting that the more price points the trendline touches, the stronger the trendline is. For example a ‘2-toucher’ may not have as much clout as a trendline that manages to stretch throughout 4 price points.

The most commonly used trendlines are diagonal and horizontal but a vertical option is also available on MT4. To apply a trendline to your chart, ensure the ‘Line Studies’ option has been checked, click which type of trendline you want to use and then draw the line by clicking once and dragging between your candles/price points.

2 – Bollinger Bands

No.2 in our list of top 5 MT4 trading tools is Bollinger Bands (Created by John Bollinger). A technical analysis tool used to measure how volatile an individual market is and also to identify when a market is overbought or oversold.

When the market in question is quiet (low volatility) the bands will appear on your chart as a contracted, tight band. And when the volatility of the market picks up you will see the bands start to widen and expand.

Bollinger bands are typically shown as 3 separate lines. A upper band, a lower band and a separate line running through the middle of the two bands. The middle line is an SMA (Simple Moving Average) and the outer lines are standard deviations of the middle SMA line.

top 5 mt4 trading

If you ever studied mathematics at college or university, the chances are you know what a standard deviation is. If you didn’t, those words probably sound quite scary! But don’t worry about the definition too much. A standard deviation in Lehman’s terms, just refers to how measurements of a group are spread out from the average.

The most common ways to trade the Bollinger bands are the Bollinger Bounce and the Bollinger Squeeze (Note that Bollinger bands are usually used in ranging markets)

Bollinger Bounce is where the price action sees the bands tested on your chart. If the price touches the upper band – you could look to sell, as often the band will return to the SMA line. The ‘bounce’ can also work inversely. The price may sell off to the lower band and bounce back to the SMA. In this case, you could look to buy the touch of the lower band.

Bollinger squeeze refers to the bands squeezing together. Which usually results in a ‘breakout’ of the bands. If the price breaks out above the upper band this can be an indication to Buy. And if the price breaks below the lower band this can be an indication to sell. These indicators can come in very handy and we hope you can see why they made our list of top 5 mt4 trading tools!

3 – Fibonnaci Retracements

At spot No.3 in our list of top 5 MT4 trading tools are Fibonacci retracement tools. They are a fantastic technical analysis indicator for use on MT4. It is a sequence of numbers where each successive number adds up to the previous two numbers:

1   1   2   3   5   8   13   21   34   55 and so forth.

The MT4 fibonnaci tool will plot % retracement lines using the fibonnaci calculation onto any market. The subsequent lines are used for support and resistance levels (much like trendlines mentioned above)

To draw your fibonnaci retracements lines, select the fibonnaci indicator on mt4 and click and drag you cursor between 2 extreme price points. When you select you final price point and release your mouse, you will be able to see each ‘fib’ level on your chosen market. 

The trendlines you will see will be at 0%, 23.6%, 38.2%, 50%, 61.8% and 100%. These % have been applied to the difference between the high and low price points you selected when drawing your initial fibonnaci retracement.

top 5 mt4 trading

As with the trendlines mentioned in section 1. These lines can provide support and resistance levels as well as price targets.

4 – Relative Strength Index (RSI)

The penultimate top 5 MT4 trading tools spot goes to the RSI. RSI is a momentum indictor (oscillator) measures the speed and the change of price movements on a particular market. The indicator usually is shown as an oscillating chart between the minimum 0 and maximum 100 readings.

When the indicator shows an RSI of 70 or above, the market in question is generally considered ‘Overbought’ and traders often look for short trade entries. When the RSI reads at 30 or below, traders often look for long trade entries as the market is considered ‘Oversold’.

The default setting of RSI indicators is usually used on 14-day periods but shorter timeframes can be used for shorter outlooks and longer timeframes for longer outlooks.

RSIs are not just used as indicators for overbought and oversold markets. Often, they can be used to look for divergence against price action, reversals, crossovers and uptrends/downtrends.

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For those interested in the calculation behind the RSI Indicator. It is as follows:

RSI = 100 – 100 / (1 +RS)

To attach the RSI indicator to your MT4 chart, simply drag and drop from the indicator list or from the indicator dropdown.

5 – MACD (Moving Average Convergence Divergence) 

Our final item in the top 5 MT4 trading tools is MACD. The MACD indicator is another momentum indicator used to identity changes in a selected markets momentum by selecting data from different moving averages. 

Convergence = 2 Moving averages are coming together

Divergence = 2 Moving averages are moving away from one another

There are 3 main components of a MACD indicator. They are as follows

1 – MACD Line (Measures the distance between the 2 moving averages)

2 –Signal Line (Looks for changes in momentum and helps the trade make trading decisions)

3 – Histogram (The difference between the MACD and the signal line)

MACD is calculated by taking the 12 period moving average and subtracting the 26 period moving average. The Signal line is the 9 period moving average of the MACD.

The result of the calculations above is a histogram format whereby if the MACD line crosses over the signal line from the downside, traders could interpret this as a good buying opportunity. Inversely, if the MACD line crosses over the signal line from the upside, trade often identify this as a good sell signal.

The 5 Best MT4 Trading Tools MACD

Again, this indicator can be placed on any market available on your MT4 platform and can be found in the indicators section of MT4. Simply click and drag the indicator on to the chart to activate.

Top 5 MT4 Trading Tools: Final Thoughts

  • Technical analysis is a vital part of your Trading strategy
  • There are plenty of MT4 indicators available – but don’t get lost in the sheer amount available. Stick to the ones you’ve learnt and understand
  • Indicators are most powerful when combined. If you have more than one indicator showing a buy signal, the more confidence you will have to place the trade

We hope you enjoyed our piece on the Top 5 MT4 Trading Tools – Ready to Trade? Please click here to open an account today!

Good Luck and Happy Trading!


By Chris

Chris is one of two founding members of TradingHalo. He started his career in equities as an execution dealer for a large stock-broking firm before going on to run their derivatives desk. From there, he went on to join Smart-Live Markets and then GKFX, where he assisted in their pioneering of MT4-based spread-betting and became a senior trader running large positions across a variety of asset classes including FX, Metals, Commodities, Indices and Single Stocks. Chris now works at one of the largest FX brokerages in the world and is currently Head of Trading in London. Away from Trading, Chris is an avid golfer (or at least, tries to be)