To start building a custom indicator, you’ll need to be familiar with MQL4 and MetaEditor tools.
Step one: choose what type of indicator you would like to build: leading or lagging. A leading indicator alerts you to an upcoming new trend or reversal pattern, while a lagging indicator informs you of a new trend while it’s happening. You’ll also need to consider whether the indicator contains only core elements of technical analysis, such as pattern recognition and mathematical calculations, or if it combines elements from existing indicators, such as moving averages and the RSI indicator.
Step two: fill in the properties of your new custom indicator, such as indicator name, developer details and a list of indicator inputs and parameters. All these elements help the indicator to draw trend lines within the technical charts.
Step three: this process will create a file with the defined settings of the custom indicator. Located within the EA folder, you can choose to open this data folder to start writing the indicator’s new rules and coding. If you decide you would like to create an EA from your custom indicator, you will need to familiarise yourself with the EA builder. Each EA can have its own settings, and you’ll need to incorporate it within your chart to begin the analysis.
You could assess your indicator through backtesting on a demo account, which can help you to update any elements that aren’t compatible with your trading strategy, or the instrument that you’re trading on. Once it begins to prove successful in terms of your trading plan and goals, you can test it for real on the live platform.