MT4 Charting Guide (Charts, Indicators, and Drawing Tools)

Chart types on MT4

MT4 offers three types of charts. Each one shows the same price data but in a different visual format.

Line charts are the simplest. They draw a single line connecting the closing price of each time period. Line charts give you a clean, easy-to-read view of the overall price direction, but they do not show you the high, low, or opening prices.

Bar charts show more information. Each bar represents one time period and displays the open, high, low, and close (OHLC) prices. A small horizontal dash on the left shows where the price opened, and a dash on the right shows where it closed. The top and bottom of the vertical line show the high and low.

Candlestick charts are the most popular among forex traders. They show the same OHLC data as bar charts but in a more visual way. Each candlestick has a "body" that represents the range between the open and close, and "wicks" (or shadows) that show the high and low. If the close is higher than the open, the candle is typically green or white (bullish). If the close is lower, it is red or black (bearish).

Most traders use candlestick charts because they make it easy to spot patterns and understand price action at a glance.

Timeframes on MT4

A timeframe determines how much time each candle or bar represents. MT4 offers 9 timeframes.

• M1 – 1 minute (each candle represents 1 minute of price movement)
• M5 – 5 minutes
• M15 – 15 minutes
• M30 – 30 minutes
• H1 – 1 hour
• H4 – 4 hours
• D1 – 1 day
• W1 – 1 week
• MN – 1 month

Shorter timeframes show more detail and are used by scalpers and day traders who hold trades for minutes or hours, which is essential for scalping strategies. Longer timeframes show the bigger picture and are used by swing traders and position traders who hold trades for days or weeks.

As a beginner, the H1 and H4 timeframes are great starting points. They give you enough detail without the noise that comes with very short timeframes.

Built-in indicators

MT4 comes with 30 built-in technical indicators organized into four categories.

Trend indicators help you identify the direction of the market. Popular ones include the Moving Average, Bollinger Bands, and Ichimoku Cloud.

Oscillators help you identify overbought or oversold conditions. The most used are the Relative Strength Index (RSI), MACD, and Stochastic Oscillator.

Volume indicators show how much trading activity is happening. These include Volumes and On Balance Volume.

Bill Williams indicators are a set of indicators developed by trader Bill Williams, including the Alligator, Fractals, and Awesome Oscillator.

To add an indicator to your chart, go to the Insert menu and select Indicators, or simply drag an indicator from the Navigator panel onto your chart. You can customize the settings, colors, and parameters of each indicator.

Drawing tools

MT4 provides several drawing tools (also called analytical objects) that you can place on your charts to aid your analysis.

• Horizontal lines to mark support and resistance levels
• Vertical lines to mark important dates or events
• Trend lines to draw diagonal lines connecting highs or lows
• Channels to draw parallel trend lines
• Fibonacci Retracement to identify potential reversal levels
• Fibonacci Expansion to project potential price targets
• Rectangles and shapes to highlight chart areas
• Text labels to add notes to your charts

To access drawing tools, go to the Insert menu and select Lines, Channels, Fibonacci, or other categories. You can also add frequently used tools to your toolbar for quick access.

Tips for better charting on MT4

• Keep it simple. Do not overload your charts with too many indicators. Two or three indicators are usually enough. Too many indicators create confusion and conflicting signals.
• Use templates. Once you set up a chart the way you like it, save it as a template so you can apply the same settings to other charts instantly. Go to Charts, then Template, then Save Template.
• Use profiles. A profile saves the entire layout of your charts, including all open windows and their settings. This is helpful if you analyze multiple currency pairs.
• Change chart colors. MT4's default color scheme is not loved by everyone. Right-click on a chart, select Properties, and customize the colors to your preference. Many traders prefer a clean white or dark background.
• Zoom in and out. Use the + and – keys on your keyboard to zoom in and out of the chart. This helps you see both the big picture and fine details.