Trading Forex with MetaTrader 4
The MetaTrader brand has become synonymous with forex trading. After all, it’s the staple for most notable forex brokers and the first trading platform all traders will use at the beginning of their forex trading journey. MetaTrader 4 or MT4 is one of the two trading platforms developed by MetaQuotes Software. The other one being its successor, the MT5. And since it’s so ubiquitous, it goes without saying that you can download MT4 on both Mac and Windows PCs. The MT4 app for mobile devices doesn’t disappoint either as it features almost all the same tools and benefits that you can find on the desktop version. The best part is that both MT4 and MT5 are available for free from all brokers or directly from the MetaQuotes website.
MetaTrader 4 has been in active development for more than 10 years now and has grown into a huge ecosystem of various trading solutions including a Marketplace where millions of traders can buy and sell trading services like Expert Advisors and Forex Signals.
The community forum is also very active which is extremely helpful since troubleshooting and support can always be found quite easily. Why MT4 is such a powerful platform though is because it places the whole financial market directly at the fingertips of the trader. From live price feeds with one-click trading, charts and economic calendar – you won’t even need to minimize the window to look elsewhere for additional information. Everything you will ever need is easily available directly in the platform.
Regardless if you subscribe to the fundamental or technical philosophy of trading, MetaTrader 4 offers the best of both worlds. Use customizable indicators that you can place directly on the chart and keep abreast of the financial markets with the live economic calendar monitoring every relevant upcoming news release.
Even greater MT4 features:
- Instant/Market execution – When opening a position in MetaTrader, you have the option between two order types; instant/market execution orders or pending orders. The type of execution is usually determined by your broker and cannot be modified. In short, when placing an instant execution order, you are requesting to trade a currency pair at the current price available in your feed and if your broker can’t provide the price you requested, you will be offered a requote. With market execution, your broker is guaranteed to fill your order at the best available price even if that means you get better or worse pricing. This usually isn’t a big deal except during times of high market volatility during which you may find it hard to enter a position due to the amount of requotes.
- Pending orders – In the case of pending orders, you have the option to open a trade whether that is a buy or sell, at a predetermined price of your choosing. So, if the current ASK price of EUR/USD is 1.05643, and you wish to buy only when it reaches 1.05650, you can place a Buy stop order which will guarantee your trade as soon as that price is reached. Note that Stop Loss and Take Profit orders cannot be placed during the opening of pending orders and instead should be set-up after the fact.
- Historical data for backtesting – Backtesting your trading strategy is crucial for every forex trader and the MT4 trading platform has the tools to help you do just that. Theoretically, if your strategy seems to work on previous market conditions it will probably perform similarly with the current market. It’s always better to backtest with a big enough sample size to get a good idea how consistent your strategy actually is so you should at least start testing from 2005 if not earlier.
- Forex Signals and Expert Advisors – For the more technically-inclined, MT4 also includes the MQL4 which is a programming language used for the development of automated trading robots called Expert Advisors. Using the hundreds of technical indicators already available in the trading platform, you can create your very own trading robot that can monitor specific currency pairs of your choosing and trade automatically based on a set of predetermined rules. Likewise, you can create Signals based on your robots and have other traders copy your trades for a fee. An MT4 Marketplace is a great place for setting up or following a Signal service.
Even though MetaTrader 4 is the leading trading platform, many have popped up to take its place. Some brokers also offer alternatives like Trading station and NinjaTrader to complement their MT4 offering. Admittedly there are traders that have moved away from using MetaTrader due to its outdated yet user-friendly interface. They also claim to have found better-charting capabilities with greater customization in terms of timeframes in other trading platforms. MT4 can be limited in some departments but still, it remains one of the best trading platforms out there. It’s stability and incredible versatility are second to none. However, it is highly recommended that traders use the primary platform available at their broker of choice. This makes it easier to get support and accurate price feeds according to their broker’s offering.