The technical capabilities of the MetaTrader 4 (MT4) trading terminal allow you to impose a moving average on any other indicator in the terminal.
In the picture above, you can see how a simple moving average with a period of 21 (red line) is applied to the standard RSI indicator with a period of 14 (blue line). How to do it yourself?
This is not difficult. First, you need to use standard methods to set the indicator you need on the chart of the currency pair, on which you want to set the moving average.
Then, in the MT4 “Navigator” terminal menu, select the moving average indicator and use the left mouse button to drag it to the indicator window using the Drag and Drop technology. In my example, this is a standard RSI indicator. But you can overlay the average on other indicators, depending on your needs.
After that, in the Moving Average Parameters window in the “Apply to” tab, select the “Previous Indicator Data” parameter. See the illustration below.
The moving average will be applied to the indicator and we will get the signal line of the RSI indicator.
If you select the “First Indicator Data” option from the menu (overlay the indicator on the data of the first indicator), the average will be plotted based on the data of the very first indicator, which is not necessarily the indicator you need (if you have other indicators on the chart).
For our example, you can choose any parameter, since we have only one indicator – it’s the first and the previous one.
Accordingly, you can customize any standard parameters of the moving average applied to your indicator, including period, color, thickness, etc. Also, in the “Display” tab, you can change the display mode of the average on different timeframes (periods).
Applying a Moving Average to another indicator allows you to smooth its readings and get more reliable and high-quality signals.
Hopefully this article will help you use all the features of your MT4 trading terminal to build your own trading system.