If you're trading for a prop firm or planning to then one of the most essential skills you’ll need under your belt is chart analysis. And when it comes to doing that on MetaTrader 5 (MT5), you’ve got a powerful tool that’s just waiting to be fully tapped into. Now, if you’re staring at those candlesticks and wondering what sorcery is behind their movements then don’t worry. Let’s discuss how to read and analyze charts in MT5 so it actually makes sense so you can trade smarter.
Why Charts Matter in Prop Firm Trading
Let’s get something straight—prop firms don’t just want you to click buy and sell randomly. They want you to trade with intent. Every decision you make should be backed by some kind of logic or data. That’s where chart analysis comes in.
Charts show you:
- Price movement (the heartbeat of the market)
- Market sentiment
- Potential trade setups
- Entry and exit points
Basically, reading charts well is like being fluent in the market’s language. If you don’t speak the language, you’re just guessing—and in a prop firm, guesswork gets expensive real fast.
Getting Comfortable with the MT5 Chart Layout
Chart Types Available in MT5
There are three types of charts in MT5:
- Line Chart – Simple. Clean. Just a line connecting closing prices. It’s basic but can be helpful for quick trend analysis.
- Bar Chart – Shows open, high, low, and close (OHLC) for each time period. A bit clunky, but some traders love it.
- Candlestick Chart – This one’s the favorite. Each candle gives you the OHLC info, and it’s super visual. You can spot trends, patterns, and momentum shifts at a glance.
Timeframes: The Bigger Picture vs. the Minute Moves
In MT5, you can toggle through a ton of timeframes—from 1-minute (M1) charts to monthly (MN) charts. Use multiple timeframes.
- Higher time frames (H4, D1, W1) show you the broader trend.
- Lower time frames (M1, M5, M15) help you fine-tune your entries and exits.
Say you spot an uptrend on the daily chart. You don’t want to hop in blindly—check the 15-minute chart for a good pullback entry.
Zooming In: How to Actually Read a Chart
Identify the Trend
Before you do anything else, ask: Is the market trending or ranging?
- Uptrend: Higher highs and higher lows.
- Downtrend: Lower highs and lower lows.
- Range-bound: Prices are bouncing between support and resistance.
In MT5, draw trendlines using the Line tool (you’ll find it in the toolbar). Just connect two or more swing highs/lows. Easy.
You can also slap on a moving average (MA) for a quicker read. The 50 or 200 EMA are go-to indicators for spotting the trend direction.
Spot Support and Resistance Levels
Support is where the price tends to stop falling. Resistance is where it struggles to rise.
In MT5, you can draw these zones using the horizontal line tool. Don’t overthink it—just look for areas where price reacted multiple times.
These zones matter a lot. They often become bounce points for entries, exits, or breakouts.
Recognize Chart Patterns
If you’re a visual person then chart patterns are your best friend. Here are a few to keep your eye out for:
- Double top/bottom – Reversal signals.
- Head and shoulders – Trend reversal pattern.
- Flags and pennants – Continuation patterns.
- Triangles – Could break either way—great for breakout traders.
MT5 won’t draw these for you. You’ll have to practice spotting them but once you do, they become second nature.
Use Candlestick Patterns to Your Advantage
Candlesticks aren’t just pretty—they can give you real clues about where price might head next.
Here are some must-know patterns:
- Doji: Market indecision.
- Engulfing candle: Reversal signal (bullish or bearish).
- Hammer/Inverted hammer: Bullish reversals at the bottom of a trend.
- Shooting star: Bearish reversal at the top.
Zoom in and pay attention to how candles form around key support/resistance levels.
Adding Indicators Without Going Overboard
MT5 comes packed with indicators. And yes, it’s tempting to throw a dozen on your chart. But more isn’t better. Clarity is key—especially in prop firm trading where decisions need to be fast and calculated.
Some Solid, Go-To Indicators:
- Moving Averages (MA): Trend direction and dynamic support/resistance.
- Relative Strength Index (RSI): Spot overbought or oversold zones.
- MACD: Great for momentum and divergence analysis.
- Bollinger Bands: Helps identify volatility and breakout potential.
- ATR (Average True Range): Measures volatility—good for setting stop-losses.
You can find and apply these indicators in MT5 by going to Insert > Indicators. Keep your chart clean—stick to 1–3 max.
Using MT5 Tools for Deeper Chart Analysis
MT5 isn’t just a passive chart viewer—it’s built for active analysis. Let’s go through some handy features you should be using.
Crosshair Tool
Click on the crosshair (or hit Ctrl+F) and hover over the chart. You’ll see the time, price, and distance between two points. Super useful for measuring pip movement or tracking candle formations.
Fibonacci Retracement
This tool helps you find likely reversal or continuation zones. Traders love using Fib levels (38.2%, 50%, 61.8%) after a strong price move to catch a pullback.
To draw it, select the Fibonacci tool from the toolbar, drag from the swing low to high (or vice versa), and boom—you’ve got levels.
Zoom and Scroll
Scroll left to see price history. Zoom in/out to focus or expand your view. The better your visual understanding of past price action, the more confident you’ll be about what might come next.
