How to use custom indicators and EAs to automate your trading on MetaTrader
If you’re looking to take your trading to the next level, custom indicators and Expert Advisors (EAs) on MetaTrader 4 (MT4) and MetaTrader 5 (MT5) are powerful tools to enhance your strategies. These tools, designed with MetaQuotes Language (MQL4/5), allow traders to customize their charting experience and automate their trades. While both platforms offer these features, MT5 brings more advanced capabilities, including a wider range of chart types, timeframes, and the ability to trade a variety of instruments. In this article, we’ll explore the benefits and differences between custom indicators and EAs, helping you understand how to leverage these tools to improve your trading performance.
Custom indicators on MT4/MT5
Custom indicators are tools designed in MetaQuotes Language (MQL4/5) that allow traders to display advanced technical calculations on their charts. While both MT4 and MT5 support custom indicators, MT5 offers more features and flexibility, including additional chart types and timeframe options.
Examples of custom indicators:
- Pivot Point Indicator: This tool calculates and displays key support and resistance levels, which are critical for identifying price levels that could cause reversals.
- Moving Average Crossover: This custom indicator combines multiple moving averages (e.g., 50-day and 200-day) to identify trend changes. A cross above suggests a potential buy, and a cross below signals a sell.
→More about how to use Moving Averages in CFD trading.
- ADX (Average Directional Index): ADX measures the strength of a trend. Traders combine it with other indicators like moving averages to confirm whether a trend is strong enough to follow.
- MACD (Moving Average Convergence Divergence): Available on both MT4 and MT5, MACD helps determine the momentum of a price move and is one of the most popular indicators for traders.
MT4 vs MT5
- MT4: Primarily for forex trading, MT4 offers a simpler, more straightforward interface with support for custom indicators and basic charting tools.
- MT5: An upgraded version, MT5 offers more timeframes, chart types (like ticks), and the ability to trade other instruments like stocks and commodities. Custom indicators on MT5 can also be more complex and handle more data points.
MT5 provides more processing power, making it ideal for traders who want to use more advanced strategies and indicators without the limitations of MT4.
Expert Advisors (EAs) on MT4 and MT5
Expert Advisors (EAs) are automated trading robots coded in MQL4/5 that follow a set of predefined rules to open and close trades automatically. They help traders by executing trades with speed and accuracy, reducing emotional decision-making and allowing for 24/7 trading.
Types of EAs:
- Scalping EAs: These execute multiple small trades in a short period, capitalizing on small price movements.
- News trading EAs: These EAs react to high-impact economic news releases like NFP (Non-Farm Payroll) by opening or closing positions based on expected volatility.
- Breakout EAs: They place trades when the price breaks through established levels of support or resistance.
- Hedging EAs: These open both buy and sell positions to manage risk during market fluctuations.
Some examples include the Meet Algo Breakout EA, which automatically places trades during breakouts, and the Dark Venus EA, which uses trend-following strategies to enter trades at the right moment.
MT4 vs MT5 for EAs
- MT4: Known for its reliability and being user-friendly for forex traders, MT4 supports EAs that focus on trading currencies.
- MT5: In addition to forex, MT5 supports a broader range of instruments, including stocks and commodities, making it ideal for those who want to diversify their trading portfolio. MT5 also supports multi-currency EAs, which is helpful for traders who trade multiple instruments simultaneously.
MT5 EAs benefit from improved speed, more robust features, and greater flexibility. For example, in MT5, you can use multi-currency strategies, allowing the EA to open positions in several currencies at once based on market conditions.
Where to find and use EAs for FX trading
You can easily find and download EAs in several places:
- MetaTrader Market: Directly from the MT4 or MT5 platform, where you can purchase or download free EAs.
- ForexFactory: A popular forum where traders share and discuss EAs, often for free.
- Fiverr/Upwork: If you want something custom-tailored to your specific needs, you can hire a developer to create an EA just for you.
How to install and use EAs on MT4 & MT5:
- Download or buy the EA: Make sure you’re getting it from a trusted source like the MetaTrader Market or ForexFactory.
- Place the EA in the “Experts” folder: Navigate to your MT4 or MT5 directory, find the “Experts” folder, and place the EA in it.
- Enable live trading: In MT4/MT5, go to the “Navigator” panel, drag the EA onto a chart, and allow live trading. Make sure you’ve enabled DLL imports if required.
- Adjust EA settings: Customize settings such as stop loss, take profit, risk level, lot size, and other parameters according to your trading strategy.
Pro tip: Always test your EA on demo accounts of trusted brokers to ensure it works as expected before using it in a live account.
Backtesting EAs for FX trading
Backtesting is crucial for evaluating how well your EA would have performed in the past based on historical price data. Both MT4 and MT5 feature backtesting tools, but MT5’s Strategy Tester offers more advanced functionality, including multi-currency and multi-timeframe testing.
Steps for backtesting in MT4 & MT5:
- Open the strategy tester: In MT4, press Ctrl+R, and in MT5, go to View > Strategy Tester.
- Select your EA: Choose the EA you want to backtest.
- Set parameters: Pick the currency pair, timeframe, and date range you want to test.
- Start backtesting: Hit the “Start” button and let the platform run the test. MT5 also allows you to test multiple EAs simultaneously.
- Review results: Analyze the backtest report to see profitability, drawdowns, and performance under different market conditions.
Backtesting in MT5:
- MT5’s backtesting engine supports multi-currency testing and allows for a more realistic evaluation of your strategy’s performance by simulating trades with multiple instruments at the same time.
Tracking and analyzing EA performance
Tracking and analyzing the performance of your custom indicators and EAs is critical for improving your strategy. One effective way to do this is by maintaining a trading journal. Here’s how you can make it work for you:
Best practices for your trading journal
- Choose a format: Use a physical notebook, Excel sheet, or an online tool like Evernote to keep track of your trades.
- Define categories: Include details like entry/exit points, stop loss, take profit, position size, and the market conditions when the trade was executed.
- Record all trades: Track every trade, including modifications to your strategy or EA settings during the process.
- Analyze performance: Regularly review your trading journal to identify patterns and refine your strategies accordingly.
- Monitor emotions: Track your emotional state during trades—whether you felt confident, fearful, or impatient. This helps identify emotional biases that could impact decision-making.
- Review & adjust: Use your journal to improve strategy, adapt to market conditions, and optimize your custom indicators and EAs.
- Stay disciplined: Consistent journaling is key to refining your approach and achieving better trading results over time.
Conclusion:
Custom indicators and EAs on MT4 and MT5 are invaluable tools for traders looking to automate their strategies and enhance their trading performance. While MT4 remains a staple for forex traders, MT5 offers superior functionality, including multi-instrument trading and more advanced backtesting capabilities. Whether you’re using custom indicators to identify key trends or automating trades with EAs, these tools help you execute your strategies more efficiently, improve accuracy, and eliminate emotional decision-making.
Remember to always backtest and journal your trades to continuously improve your strategy. Happy trading, and make sure to manage your risk appropriately!
Disclaimer: As always, be sure to manage your risk and only trade with capital you can afford to lose.
Top Forex brokers to start FX trading
If you’re ready to take your trading to the next level with custom indicators and expert advisors (EAs), choosing the right broker is crucial. A reliable Forex broker should offer seamless integration with MetaTrader platforms, low-latency execution, strong liquidity, and the right conditions for automated trading. Below, we’ve compiled a list of the top Forex brokers that provide excellent support for EAs, ensuring you can optimize your trading strategies with confidence.
XTB FX trading
XTB is a well-established and trusted broker, known for its secure and transparent trading environment. Operating in over 190 countries, it is regulated by top-tier authorities such as the FCA, CySEC, and KNF, ensuring strong compliance and reliability. Traders can choose between advanced platforms like xStation and MetaTrader 4, making it easy to trade a wide range of assets, including Forex, stocks, ETFs, and cryptocurrencies. With flexible account options like Standard and swap-free accounts, XTB caters to both beginners and experienced traders, offering solutions tailored to different trading styles and needs.
BlackBull FX trading
BlackBull Markets is a reliable Forex and CFD broker known for its seamless trading experience on the advanced MT4 and MT5 platforms. Equipped with powerful analytical tools, these platforms allow traders to develop and execute strategies with ease. BlackBull Markets prioritizes user experience, offering excellent customer support and extensive educational resources, making it a great choice for traders of all skill levels. With a strong focus on security and transparency, it provides a trustworthy trading environment designed to help traders succeed in the dynamic Forex market.
AvaTrade FX trading
AvaTrade is a reputable online broker, regulated across multiple jurisdictions to ensure a secure and trustworthy trading experience. It offers a wide range of instruments, including Forex, commodities, cryptocurrencies, and CFDs, catering to different trading styles and preferences. With user-friendly platforms like MetaTrader 4, MetaTrader 5, and the AvaTradeGO app, traders can access advanced charting tools and technical indicators for in-depth market analysis. AvaTrade provides various account types, including demo accounts for beginners, along with extensive educational resources such as webinars and eBooks. Backed by multilingual customer support, AvaTrade delivers a smooth and accessible trading experience for traders of all levels.
Exness FX trading
Exness is a popular choice among traders, offering a wide range of instruments, including currency pairs, commodities, indices, cryptocurrencies, and CFDs. Regulated by the FCA in the UK and CySEC in Cyprus, it ensures a secure and reliable trading environment. With competitive spreads on both Standard and Professional accounts, Exness suits different trading strategies. The broker stands out with excellent customer support via email, live chat, and phone, while its advanced platforms, MetaTrader 4 (MT4) and MetaTrader 5 (MT5), provide a smooth and feature-packed trading experience.
eToro FX trading
eToro is a widely recognized online trading platform, known for its user-friendly interface and innovative social trading features, making it a great choice for both beginners and experienced traders. Regulated by leading authorities like the FCA, CySEC, and ASIC, it ensures a secure and transparent trading environment. With access to a diverse range of assets, including stocks, cryptocurrencies, commodities, and indices, eToro makes it easy for traders to build and diversify their portfolios.
Risk disclaimer: eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.
Related articles:
Forex custom indicators and expert advisors - FAQ