Setting Up a Chart in Metatrader 4
Technical analysis deals with interpreting historical prices/patterns with the idea of forecasting future price patterns on the right side of a chart. There are trading theories that require a deep analysis of historical prices until the trader can come up to a time frame that can actually be used for trading. Such a theory is the Elliott Waves theory and knowing how to setup a chart in Metatrader will certainly help to automate the time frames. Other traders are using different technical indicators like trend indicators or oscillators when entering/exiting a trade. In order to do that in Metatrader, there are some basic things one needs to know.
Adjusting the Platform
When opening a chart with the default settings offered by the Metatrader, it looks like the image below. Not really helpful for any trading purposes not to mention for charting your way when trading the Forex. There are a number of things to do with such a chart and first thing is to choose what type of chart you want it to be: candlesticks, bar chart or line chart.
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By far, it is recommended that a candlestick chart is used due to the fact that on top of the actual prices, Japanese candlestick techniques can be applied. The three options for choosing a chart style are to be found on the upper side of the Metatrader platform, right in the middle.After choosing a candlestick chart, we need to know how to differentiate those candles, meaning to see when price moved to the upside and when it moved to the downside. The following steps are recommended to be taken:
- Right-click on the chart and choose Properties. The Colors tab is the one that is opened first and here we can choose the desired colors for all basic things that appear on the chart right now. The default color for Background is black and we will leave it like this for now, but it should be noted that it can be changed into any other color. The Foreground is represented by the price levels on the right side of the screen and the time element on the horizontal lower side of the chart. This foreground color must be different than the one use for the background as otherwise the information will not be seen. In this case, we stick with white.
- The grid is formed by those small boxes the screen is split into and later we’ll have the option of getting rid of them if we want to. At this moment of time we can change the color for it in case we want to use this option.
- Bar up, bar down, bull candle, bear candle represent the options we have for coloring the candles. The implicit color for a bearish or down candle is red, while green always shows a candle that is moving to the upside.
- The rest of the lines are not that important when setting up a chart and it is time to switch to the common tab from the top left of the Properties tab. As you can see here, the chart auto scroll option is the default one, but we don’t want to have a chart that is always dragging you to the current prices. The technical analysis implies looking back in time and the way to do that is to choose the Chart shift option and get rid of the chart auto scroll option.
- By choosing not to show the grid, the chart looks like this.
Saving a Template
The next thing to do is to automate this process in order not to be forced to repeat it every time we open a new chart. The way to do this is to save the chart as a template. To do that, right-click on the chart and chose the Template tab. From there, Save Template, give a name to it and that’s it.
From this moment on every time a new chart is open on any currency pair or on the same currency pair but on a different time frame, this template can be used by loading it.
Saving a Profile
After having a template saved, technical analysis can start and, depending on the type of technical analysis used, different things can be done on a chart. Elliott Waves users use the theory to effectively count the waves so a trading chart will look like having a lot of numbers and letters on it. These traders are looking to interpret if the market is making an impulsive move or a corrective one as according to Elliott price action consists of five waves corrected with another three. Numbers are used to count impulsive waves, or the five waves, while letters are used to count corrective waves. Other traders are using trend indicators (these indicators are applied on the actual candles that can be seen on the chart) or oscillators (an oscillator is always applied on the bottom of the chart and not on the actual candles) to find out places to enter or exit a market. Market geometry can be used as well and this implies a lot of lines and channels that start from older prices and are projected on the right side of the chart to find out support and resistance levels that are important and can be used when trading. No matter the trading style and the type of technical analysis used on a chart, at one moment of time one can save this as a Profile. Closing the Metatrader platform means that the work and profile are automatically saved and by opening it again all the work will be there. A profile can be taken and uploaded on other Metatrader account very easy and this is one of the great things about this trading platform. The above represent just basic information about how to set a chart in Metatrader and how to use the chart area to analyze the market. Only by working hard and finding on your own the tips and tricks with Metatrader will give you an idea why this is the best trading platform in the world for retail traders.
Other educational materials
- Forex Trading Accounts and the Value of a Pip
- The Importance of Swap and Spreads
- How to Enter/Exit a Trade
- How Do I Make a Profit from Forex Trading?
- Forex Market Terminology
- Profit from Forex Trading Using Different Trading Styles
Recommended further readings
- Testing for arbitrage opportunities within the foreign exchange market. Hussain, I. (2009).
- “INNOVATE ONLINETRADING BY ADDING SOFTWARE BRIDGE: IDEA AND IMPLEMENTATION.” (2014). Qureshi, Muhammad.