The Best MT5 Indicators for Forex Traders

MetaTrader 5 is known as one of the most sophisticated multi asset trading platforms. MT5 comes with preinstalled indicators and we'll discuss some of the best indicators below

  • The ZigZag
  • The alligator
  • The Money Flow Index (MFI)

The ZigZag is the most basic indicator on our list. Traders and analysts use it to determine when the security’s price will start reversing. The indicator marks the support and resistance areas, which basically means the ZigZag finds out the areas where the buyers’/sellers’ positions are stronger and by doing that, it identifies drastic changes that will take place in a trend. The shape of the trend looks like a zig-zag, that is why this indicator has that name.
Alligator indicator uses three moving averages (MA) that represent the jaw (slowest MA), teeth (intermediate MA), and lips (fastest MA). The alligator is used to determine the stationary phases of the market and then, by following the three MAs, determining the time when the non-trending situation will change into an upward or downward trend.
The third indicator is the Money Flow Index (MFI). The MFI uses price and volume of an asset for detecting the overall situation of the market: whether that asset is overbought or oversold. By measuring this on the scale, the MFI indicator gives out signals as to when the price will increase or decrease.

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The best Forex indicators MT5 platform offers

MetaTrader 5 (MT5), alongside its predecessor MT4, has become an incremental aspect of Forex trading. Unlike the previous version, MT5 had much more space for lots of different instruments. MetaTrader 5 is known as a multi-asset trading platform as it offers access to various asset classes such as Stocks, Forex, Indices, Bonds, Commodities, Crypto. Meanwhile, MT4 is consumed for mainly trading Forex pairs. MT5 was released in 2010 and became highly popular right away. The popularity only grew with passing years and as a result, you can find many trading algorithms and indicators developed for the platform. 

If you are looking for accurate MT5 indicators, please be noted that there are various market conditions. Some indicators are build for trading ranging, while others are made for trading trends. There are indicators that work best for certain trading instruments and fail to be productive for the rest of markets.
MetaTrader 5 indicators allow traders to do a quick research of the recent price movements, detect various patterns in trends, and try to predict further occurrences. There are lots of top free MT5 indicators, both pre-installed and available to download on the internet. Meta market is an online market where you can download various algorithms and indicators that are not built-in on your platform. The best MetaTrader 5 indicators downloading won't take long, however, careful research is needed before making a decision. There are many algorithms that fail to produce any results. It's critical to avoid scams when purchasing an algorithm or an indicator. 

Our pick of Forex MT5 indicators include:
  • The ZigZag
  • The alligator
  • The Money Flow Index (MFI)
Traders use these indicators for various different reasons. In this article, we will discover their functionalities together. But first, let’s see how you can toggle them within the software.

How to install MT5 indicators?

As we mentioned earlier, there are many indicators already available in MetaTrader 5, and those three in our list, the ZigZag, alligator, and MFI are all pre-installed on the platform. Therefore, traders only need to turn them on to start using them.
To toggle the ZigZag indicator on, you need to go to the Insert menu in the top-left corner of the screen, choose Indicators, go down to Custom, and find ZigZag all the way to the bottom of the list. When you select it, the window will appear where you can customize the color of the lines, as well as their timeframes.
As for the alligator, you need to go to the same menu and find Bill Williams under the Indicators list. There, you need to press the Alligator indicator and then customize the settings. The MFI indicator can be found in the Volumes sub-menu, and it also allows for a certain level of customizability.

The three indicators in action

After turning the top FX indicators, MT5 becomes a price-analyzing platform. Each one of these indicators are powerful in their own way and can take the traders’ positions to the next level. Let’s see how they work:

The ZigZag - one of the best trend indicators MT5 offers in our opinion

The ZigZag is one of the most basic tools in MT5 that many traders and analysts use for observing the current trends and determining when they will reverse. But this predictive nature is less intuitive than other indicators and the ZigZag is predominantly used for analyzing the already-occurred trends.
Best free MT5 indicators
The indicator first determines the support and resistance areas on the chart. What this means is that the ZigZag indicator will find out when the buyers’ and sellers’ positions are the strongest and how they affect the price trends on the market. Then, all of this translates into the up/down swings of the trend, giving us the form of a Zig-Zag pattern.
Usually, the default value for the ZigZag indicator is 5% fluctuation. However, this tends to produce much more price swings and overcomplicates the image. That is why traders prefer a 9% fluctuation value; this way, the Zig-Zag will be a lot cleaner and will show a bigger picture of market developments.

The alligator – transitions from a non-trending to a trending market

The next indicator in our list is the alligator. It was created by an American trader Bill Williams, who is known to have developed indicators with creative names, including the Awesome Oscillator Indicator and alligator.
This indicator is called the alligator because of its resemblance to the actual reptile: it has three lines that represent the jaw, teeth, and lips of the alligator.
  • The jaw is a 13-period moving average that is shifted forward by 8 bars
  • The teeth are an 8-day moving average that is shifted forward by 5 bars
  • The lips are a 5-day moving average shifted forward by 3 bars
While there are the best MT5 indicators free download platforms offer other than the alligator, this indicator is still very special because it visualizes the transition of the market from one trend to another.
Best volume indicators MT5
The above-mentioned moving averages are used in a combination to track the trends of the market. The idea behind the alligator is this: when the three lines are crossing one another, it is thought that the alligator is sleeping – there is no observable trend of the price going up or down.
The moment the beast wakes up, it sets out to find something to eat. And the longer it has been asleep, the hungrier the alligator is. But how does this translate into market terms? The moment of waking up can be spotted when the short-term MA (5-day) starts crossing other MAs above or below. From this time, an uptrend/downtrend starts to form. And as we said, if the non-trendy situation was present long enough, the uptrend/downtrend will be much more drastic.

Keep in mind that Moving Averages work in trending markets, but fail to produce profitable signals in ranges. 

The MFI – Spotting when the market is overbought/oversold

Money Flow Index (MFI) uses volume and price action to determine potential reversal opportunities in ranges. The MFI is a technical oscillator that indicates whether the market is overbought or oversold.
It uses a scale from 0 to 100 that rates the trends and by doing that, it assesses the market conditions. As a rule of thumb, the MFI reading below 20 suggests that the market is oversold, while the MFI reading above 80 suggests that the market is overbought.

When the indicator shows overbought condition, it signals that reversal might happen and sells a sell signal. When markets are oversold, traders are signaled to go long. The indicator works well in ranges, however, if fails to be affective in trends. What's more, many traders use oscillators and moving averages in combination with other indicators and trading systems. 
Best Forex indicators MT5
Now, this doesn’t necessarily mean that the price will definitely change its course; it just shows that the price is nearer to the highest/lowest point it has been recently. Some recommend that by changing the scale checkmarks from 20 and 80 to 10 and 90, the buy and sell signals will be more accurate because the lines that cross these points will have more chances of reversing.

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The best free MT5 indicators – Key takeaways

MetaTrader 5 is full of various technical indicators that traders use for predicting future price action. The platform comes with built-in indicators, however, you can find and use more from Meta market. The market offers access to some of the largest pool of indicators and algorithms. We've picked some of the best indicators that you can use when trading using MetaTrader 5:
  • The ZigZag
  • The alligator
  • The Money Flow Index (MFI)
The ZigZag indicator is used for observing the previous price movements and creating a better visualization of how one trend turned into an opposite trend. The indicator measures the support and resistance points in order to vaguely determine when the next reversing point will occur.
The alligator indicator uses three moving averages that resemble the alligator’s jaw, teeth, and lips. It is used to describe the market at its stationary form – where there is no visible uptrend or a downtrend; the alligator also shows how and to what extent that non-trendy line will turn into an uptrend or a downtrend.
The Money Flow Index (MFI) indicator assesses the price movements by rating them on a scale from 0 to 100, the indicator is an oscillator. MFI incorporates volume data and price action to determine whether the market is overbought or oversold. If the market is overbought, then there is a chance that the price will decrease. While the second scenario suggests that the price will increase. Keep in mind that analyzing overbought and oversold conditions can only help when price is traded in a range. Oscillators in general produce many false signals in trending markets. 

FAQ on the top MT5 indicators comparison

What are the top trend indicators MT5 users can use?

There are lots of trend-detecting MT5 custom indicators traders can use. In the relevant section of the software, you can find tools like Moving Averages of many sorts (adaptive, exponential, triple exponential, etc.), Bollinger Bands, Parabolic SAR, and many more.
The choice of the best trend indicator definitely comes down to the personal preference of a trader. One of the widely used indicators is a moving average, and here’s why:
Although it seems like the most basic trend-following indicator one can find, it does the most essential task in trading: it smooths the chaotic price movements and makes them much easier to understand. That is why the majority of other indicators use one type of moving average or another.

How can I download MT5 indicators for free?

The internet is full of top volume indicators MT5 users can download, as well as oscillators and moving averages. MetaTrader platforms are some of the oldest ones that are still highly popular today. MT5 was released in 2010, which explains why there are so many indicators and trading algorithms available for that platform. 
To download an indicator, you can simply go to Meta online market, where you will find both paid and free types of various trading algorithms and indicators. When it’s on your computer, the next step is to put the files in the appropriate folder. Usually, these files come in an archive, so, you have to extract them in the first place.
After that, you need to find the MT5 indicators download folder where it was originally installed. In it, there’s the MQL5 folder, which contains lots of different tools for the software. You need to paste all the new indicator files in the Indicators folder. The final step is to restart MT5, and that’s it, you have a new technical indicator installed on your platform.

Why is the alligator indicator has that name, and how does it work in trading?

The alligator indicator is among the top MT5 indicators when it comes to describing the nature of the current trend, as well as showing signs of when that trend will start moving in the opposite direction.
The alligator was developed by an American trader, Bill Williams, who is known for developing indicators with strange and creative names. The alligator indicator is one great example of that. It is called that because the three moving averages that it uses resemble the alligator’s jaw, teeth, and lips.
The way this indicator works is as follows: it first describes the market in its stationary mode, when there is no trend to be observed. Then, when the lips of the alligator start to move up or down, the market starts to go in a certain direction – the alligator is waking up and searching for the prey. The longer the beast is asleep, the hungrier it is; therefore, the market will embark on a new trend much more vigorously.

What is the best trend indicator MT5?

Keep in mind that the best indicator depends on a situation and the state of the market. Ranging markets require range trading indicators. For trading trends, MT5 offers access to built-in industry leading indicators such as Moving Average indicators. Moving Average indicators can also be found in Meta market. The market offers access to the largest pool of trading algorithms and indicators. MA indicators can be used in combination with other indicators, such as volume indicators. Volume data helps traders better predict reversals and time entries and exits. For instance, let's say you used a Moving Average indicator to enter a trade. If you see the volume is decreasing, that might be a sign of losing an interest in a trend and might be followed by a reversal. 
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