Trading Platform MetaTrader 4

Online quotes in the «Market watch» window.

Informational trading terminal MetaTrader version 4.xx

MetaTrader consists of several elements:

• 1. the main menu;
• 2. the toolbars;
• 3. the «Market Watch» window;
• 4. the «Navigator» window;
• 5. charts;
• 6. the «Terminal» window.

The main menu and toolbars enable you to perform different operations quickly and change the terminal’s settings. In the «Market Watch» window quotations for the instruments you have chosen are shown in real time. With the help of the «Navigator» window you can quickly skip to another account, add indicators on charts etc. In chart window you see dynamics model of the quotations for a certain instrument. Besides price dynamics different analytical objects can be located on charts: line tools, technical and users indicators, text and geometrical figures. Technical indicators (described in detail hereafter) will help to forecast future course. In the «Terminal» window you will get access to the history of trading and nontrading (deposition /withdrawal of money) operations, as well as to open positions and orders. In the same window you can get the real time financial news in Russian and English, provided by the leading news agencies. Also you can get messages from the dealing center via internal MetaTrader mail.

Online quotations in the «Market Watch»

We will describe in detail abovementioned and other options of the informational trading terminal MetaTrader.

«Market Watch» window

In this window you can see real time quotations. The window can be enabled/disabled by Ctrl+M key combination, or by the «View -> Market Watch» menu, or by button on the «Standard» toolbar.

• By clicking the right mouse button on the «Market watch» windows you can activate the context menu:
• «New order» — activate the window of position opening/closing or a new order placement;
• «Chart window» — open the chart of the currency pair;
• «Delete symbol» — delete the currency pair from the «Market watch»;
• «Hide all symbols» — delete all unused symbols from the «Market watch»;
• «Show all symbols» — show all instruments in the «Market watch»;
• «Time» — add to the «Market watch» a column showing the time of the latest quotations.

Market Facilitation Index (BW MFI)

Market Facilitation Index (BW MFI) is calculated as follows:

BW MFI = (HIGH — LOW) / VOLUME

Where:
HHIGH — the highest price of the current bar; LOW — the lowest price of the current bar; VOLUME — volume of the current bar.

Signals:

• When both BW MFI and Volume rise at the same time, it means that the market is moving primarily in one direction and that more people are participating in the market (volume increases). It is a good time to be already in the market.
• When both BW MFI and Volume decrease at the same time, it means that traders' interest starts to fade. Often it occurs toward the end of the trend.
• When BW MFI is pointing higher and Volume is pointing lower, it means that the market primarily moves in one direction but there are no new participants to generate higher volume. Price movements are the result of speculation.
• When both BW MFI goes down and Volume goes up, it means that there is a battle between bulls and bears (large volume) and their forces are almost equal (the price does not change significantly). This typically occurs prior to a significant move in the opposite direction. Close attention should be paid to the direction that the price moves when breaking out of this slowdown. Bill Williams called this a squat bar.

Money Flow Index – MFI

It is calculated as follows:

1) Define a "Typical Price" (TP) for the specified period:
TP = (High + Low + Close) / 3

2) Calculate "Money Flow" value (MF):
MF = TP * Volume

If "Typical Price" is higher than the preceding one then "Money Flow" is positive. If "Typical Price" is lower than the preceding one then "Money Flow" is negative.

3) Calculate "Positive Money Flow" and "Negative Money Flow":
MR = PMF / PMF

4)."Money Ratio" (MR) is calculated as follows:
MFI = 100 — (100 / (1 + MR)

Where
С — current bar close price;
С (-1) — Close of the previous bar;
Volume — current bar volume.

Money Flow Index (MFI) signals:

• if a new price high is confirmed by a new indicator high it means that the bullish trend is strong;
• if a new price bottom is confirmed by indicator bottom is means that the bearish trend is strong;
• bullish divergence warns of the weakness of the uptrend. Bearish convergence warns of the weakness of the downtrend.

Force Index

RFI = Volume * (Close — Close(-1))
FI = MA (RFI , n)

where
Volume — current volume value;
Close — the close price of the last bar;
Close(-1) — the close price of the previous bar;
MA — moving average.

Accumulation / Distribution Indicator

A/D = SUM (((Close — Low)-(High — Close)) * Volume / (High — Low) , N )

Accumulation / Distribution (A/D) indicator is similar in most aspects to the On Balance Volume (OBV) indicator but it is more complex.

Accumulation / Distribution indicator signals:

• if a new price high is confirmed by a new Accumulation / Distribution (A/D) indicator high this means that the bullish trend is strong;
• if a new price bottom is confirmed by a new Accumulation / Distribution (A/D) bottom this means that the bearish trend is strong;
• bullish divergence warns of the weakness of the uptrend;
• bearish convergence warns of the weakness of the downtrend;
• breakout of the trend line drawn on Accumulation / Distribution (A/D) indicator warns of the high possibility of the breakout of the trend line on the price chart.

Volume Indicators

The main principles of using volume indicators:

• When volume decreases it means that there is less interest, so it may be time for a reversal or price consolidation.
• When volume increases it means that there is more interest, so it may strengthen the prevailing trend or a new trend may appear.
• Sometimes gradual decreasing in volume is accompanied by rapid price movements.
• Volume highs signal that it may be time for a reversal.

On Balance Volume — OBV

1) If the current close price is above the preceding one, that is C( i ) > C(i — 1), then: OBV(i) = OBV(i-1) + Volume (i)

2) If the current close price is below the preceding one, that is C( i ) <>

wnere
C( i ) - current Close;
C(i - 1) - Close of the previous bar;
Volume (i) - current bar volume.

Stochastic Oscillator

The aim of the Stochastic Oscillator is to determine price behaviour and reversals by monitoring close prices within the recent highs and lows.

The method is based on the observation that when prices are rising their close levels tend to be closer to the top. If the prices keep rising whereas daily close levels start falling it signals that the trend is ready for the reversal.
If the quotes tend to move downwards, the close is usually near the bottom.

СThere are three stochastic lines: %K, %D, %R. They reflect current close price position against the chosen time period.

%K = 100 ( ( C — Ln ) / (Hn — Ln) )

where
C — current close price,
Ln — the lowest bottom within the number of bars of the chart
Hn — the highest top within the number of bars.
%D = SMA (%D , n1)
n1 — the value of the simple moving average.

The main signals for Stochastic:

• The indicator was created in order to trade in the flat market. Now bullish divergence / bearish convergence is the main signal that shows that the current trend is weak and reversal or correction are possible;
• In a flat market, exit from the overbought (oversold) area is a signal to sell (to buy);
• If the solid line (%K) crosses the dashed line (%D) from below this is a signal to buy; if the solid line (%K) crosses the dashed line (%D) from above this is a signal to sell.

Interaction between oscillators and price chart (hereinafter price is above and oscillator is below)

Bearish convergence:

middle signal

If the end of the oscillator is near the upper edge price fall is possible.

If the end of the oscillator is near the upper edge price fall is possible.

weak signal

We expect price stabilization with further trend change.

middle signal

If the end of the oscillator is near the upper edge trend strengthening is possible.

If the end of the oscillator is near the lower edge price rise is more possible.

If the end of the oscillator is near the mid price fall and stabilization are equally possible.

Bullish divergence:

middle signal

If the end of the oscillator is near the lower edge price rise is possible.

If the end of the oscillator is near the mid price fall is more possible.

weak signal

We expect price stabilization with further trend change

middle signal

If the end of the oscillator is near the lower edge trend strengthening is possible.

If the end of the oscillator is near the upper edge price stabilization is possible.

If the end of the oscillator is near the mid price rise and stabilization are equally possible.

Parallelism:

middle signal

Strong trend upwards

weak signal

Trend change is expected

middle signal

Strong trend downwards

Final note

When the trend is strong oscillators should be treated carefully. As a rule, false signals indicate the trend strengthening.

If the trend is upward oscillators are mainly in the overbought area and vice versa if the trend is downward oscillators are mainly in the oversold area.