History and Overview
MetaTrader 4 or MT 4, developed by MetaQuotes Software is an electronic trading platform which was released in 2005 and is used right around the world by retail foreign exchange speculative traders.
This software is licensed to a variety of foreign exchange brokers and the software is provided by these brokers to their clients. There are two key components out of which the software consists, namely:
- A Server Component – which is run solely by the broker, and
- Client Software – which the broker provides to clients who then use it to see not only live streaming prices and charts but also to place orders and manage their trading accounts.
MetaTrader 4 is an application which is Microsoft Windows-Based, and its popularity has depended on the ability to write trading scripts unique to various end users along with the ability of robots that could automate trading.
Of all the software the developers, MetaQuotes Software, released between 2002 and 2005, MetaTrader 4 had been the most significantly enhanced version.
Forex Trading
Trading Forex, and any other financial instruments, for that matter, is a complex task that should not be taken lightly. Before merely jumping on the bandwagon, there are several factors that traders, especially beginner traders need to learn and master.
The Terminology
The journey to being able to trade forex, and to minimize potential losses, starts with understanding the terms, or the ‘lingo’, that is involved in the trading industry, such as:
These are but a few of the terminologies a trader needs to familiarize themselves with an extensive list of Forex terms.
Choosing a broker
The second step in trading Forex would be to choose a broker and although it may seem to be a simple task, it is one that is crucial in the process. There are hundreds, if not thousands of brokers out there.
Before merely choosing a broker, traders need to ensure, first and foremost, that the broker is not a scam and that it has the necessary regulations, authorizations, and licences in place to ensure that the trader’s funds are safe and secure.
In choosing a broker, it is imperative that traders look at the following factors:
- What the needs, objectives and goals of the trader are
- The budget – what a trader is willing to spend on minimum deposits, trading- and non-trading fees along with being able to compensate for possible losses
- Educational and research tools provided by the broker
- The ease with which funds can be deposited and withdrawn
- The quality and availability of customer service, and more
Different Brokers offer different Trading Platforms – which one should you choose?
There are many brokers who offer a vast variety of trading platforms for traders to use. Some brokers, unfortunately, only make provision for one, often their own proprietary in-house platform.
Traders need to ensure that they conduct enough research on brokers, trading platforms, etc. before they decide to start trading.
So, what should a trader look for when choosing a trading platform? There are several factors to consider when looking at a trading platform, such as:
- Reliability – this will ensure that traders are able to get their profits back. Not only is it important to look at the reliability where execution is concerned, but also the reliability regarding deposits and withdrawing of funds.
- Licensing – this is one of the most important aspects that requires thorough inspection when choosing a platform. Platforms that are overseen and frequently audited in terms of trades, deposits, withdrawals, and funds are the most secure.
- Fees and Charges of the platform – these factors take away from profits especially if they are excessive and especially with scalpers, if the fees and charges are too high, profits are bound to grow slower than desired, or not at all.
- User-friendly – platforms should not require the trader to do additional research just on how to use it, it should be easy to use by not only advanced traders, but especially also beginners.
- Factors pertaining to leverage, margin requirements, ease of deposits along with withdrawals, these factors go hand in hand with the abovementioned.
In addition to aspects to consider when choosing a trading platform, traders also need to know the difference between prop platforms and commercial platforms.
Prop platforms are the ones that are developed by the brokerage firms themselves. These work with the specific broker in question and have features that are specifically tailored to the broker.
What makes the use of these prop platforms difficult, is that when a trader decides to change their broker, they need to get used to utilizing a new platform provided by their new broker.
Prop platforms also have a significant disadvantage pertaining to the time and effort along with resources that is put into building and customizing their proprietary platform that provides high quality features.
This is because brokers are more invested in their primary business, to earn commissions and charges. In addition, these prop platforms may be complex and harder to understand than commercial platforms.
Commercial platforms, such as MetaTrader 4 and various others, are developed by independent companies that specialize specifically in the development of trading platforms.
These companies focus on developing trading software and thus they have the time and resources to ensure high class, high quality features and user-friendly software to cater to the needs of traders.
The idea behind these commercial platforms is to draw in as many brokers in using their software, thus they must ensure that the functionalities and features are in favour of the broker while it also simultaneously caters for the needs, objectives and demands of traders.
Why should traders use MetaTrader 4?
Amidst all the various trading platforms that are available for use today, including the proprietary and in-house trading platforms of brokers, MetaTrader 4 or MT 4 is one of the most popular and most-used trading platforms.
Very few brokers these days do not include MT 4 in their list of trading platforms. MT 4 stands out amongst its peers by having proven itself to be highly effective, this is proven through the fact that an estimated 40% of retail Forex traders use MetaTrader 4.
Since its launch in 2005, MT4 has been used and popularized by a significant amount of traders along with brokerage firms around the globe.
MT4 is not only free, but also a lightweight software. When using a desktop or laptop, it can be downloaded directly from the official website.
Not only is MetaTrader available to download on desktops, but it also has mobile apps that can be downloaded on smartphones and tablets that run Android and iOS operating systems.
MetaTrader can connect to different trading platforms which allows traders to execute trades in them through either a computer or a smartphone. What does this mean? MetaTrader links the two, it allows Forex traders the opportunity to choose a broker given the fact that they support the use of MetaTrader as a trading platform. MetaTrader acts as a bridge to trade with the chosen broker within the same platform.
This allows brokers the freedom of changing brokers without having to adapt to a new trading platform.
MT 4 guarantees quick execution, amidst other factors, which is a significant advantage to brokers especially when they operate in volatile markets. MT has an array of functions and features that add to the fact that it is the best trading platform for traders to use.
MetaTrader 4 features
MQL4 and MQL4 IDE
MQL4 is a specialized programming language. This is a language that is simple and can easily be learnt and mastered by even the most novice of programmers, even those who have never been exposed to programming.
It is based on concepts of the C++ programming language and is not only high-level but also an object-orientated programming language.
There is a variety of functions associated with MQL4 which provide traders with the ability to analyse current and previously received quotes. There are also basic indicators along with functions that allow for the managing and control of trading orders.
MQL4 IDE, or Integrated Development Environment, provides traders with the ability to develop their own Expert Advisors, or EAs along with technical indicators that can vary in complexity.
MQL4 IDE not only provides traders with flexibility, but it also offers high efficiency along with functionality. In addition, MetaEditor allows traders to develop strategies in MQL4 and it comes built-in with a debugger and it allows for compilation.
As soon as the trader has made use of this function, it is automatically uploaded to MetaTrader 4 where the trader can test and optimize it using the Strategy tester.
The knowledge base of MQL4 with additional documentation and a reference guide which includes several topics, with more information on MQL4 itself and more info on MQL4 IDE can also be viewed.
EAs or Expert Advisors
These are automated trading systems which are also known as commercial robots. This is also known as algorithmic trading and is one of MT4’s strongest features.
The purpose of EAs is to analyse data which enables them to make negotiations in the system during a real-time event along with an event which was previously planned.
By using EAs, obstacles pertaining to analytical and trading activity can be eliminated.
The use of EAs allows traders to create their own applications for use, using these applications along with being able to upload them to a code library. They can also be sold on the MetaTrader Market.
Custom Indicators
The purpose of this feature is to allow traders the opportunity to create their own indicators by using MetaEditor which is embedded in the MetaTrader software. Traders have access to 30 indicators that come built in.
These indicators can be used to analyse commercial situations pertaining to the market and allow the trader to use them in their favour. MT4 provides traders with a selection of 2000 indicators or 950 trading robots.
Scripts
At the beginning of a given event, scripts are responsible for handling operations. Unfortunately, scripts do not allow for any other simultaneous operation.
Scripts are designed to assist traders in calculating possible risks along with managing their operations and allow for the export and import of data along with the creating of orders in closed markets. MT4 provides traders with over 300 scripts which can be used.
MetaTrader Market
The Market provided by MetaTrader is considered the largest in the world pertaining to Forex trading applications and these have already been included in the platform. Traders have access to thousands of indicators and EAs which can either be free or paid for.
All of these originate from well-known along with novice developers and downloads can be done without having to leave the MT4 platform.
For every market, there is a detailed description included along with screenshots and a free demo version. The demo version can be tested in the Strategy Tester provided by MT4. This allows traders a comprehensive overview and hands-on testing before purchasing an item.
In addition, the MetaTrader Market also includes, but is not limited to, the following features:
- Wide Selection of trading application
- Demo versions on all programs which can be tested
- Secure purchases via a protected connection
- Wide range of payment methods which include popular payment systems along with bank cards
Trading and Orders
MT4 is a flexible and easy to use trading system that allows traders to implement trading strategies despite their complexity.
Traders can perform trades despite the current situation of the market through combining various types of markets, orders and even using trailing stop.
MT4 makes provision for three trade execution modes which are instant, request and market. This not only provides traders with flexibility, but the ability to select the appropriate mode to be used for various trading situations.
In addition, there are also trading order types used by traders where they provide the broker with an instruction to perform a trade on their behalf. MT4 makes provision for the following:
- 3 execution modes
- 2 market orders
- 4 pending orders
- 2 stop orders
- Trailing stop
Market Orders are used where the trader requires instant execution while pending orders can be formed either at the current moment but also in future should the market situation meet the specified conditions.
Stop Orders are there to aid the trader in locking the profits that they have obtained and to further minimize their losses. They can be used in combination with either market or pending orders.
Stop Loss is specifically designed to minimize any losses incurred by the trader should the forecast they made be wrong.
The purpose of Trailing Stop is to automatically move Stop Loss not only a fixed but safe distance away from the current price should the latter then move in a more favourable direction.
Should the price reverse, the Stop Loss will stop moving and thus the trader’s profit is protected, and losses are minimized.
Trading Signals
This feature allows traders to copy deals that have been performed by other traders in real-time. MT4 makes provision of a showcase which contains more than 3200 free and commercial signals on the website, or on the Signals tab on the trading platform.
Signals are displayed by their individual trading results with the most successful ones being displayed at the very top of the list.
To use this, the trader can select their signal provider and then subscribe to their signal. After that they can copy deals on not only a live account, but a demo account as well without having to exit MT4.
Traders who have built up substantial experience, knowledge, and skill, and are more professionals in trading could also become Signal Providers.
Technical Analysis
MT4 has a vast variety of tools with which analysis can be done on various markets regardless of the complexity thereof. MT4 offers traders the following:
- 30 built-in indicators
- 2000+ free custom indicators along with 700 which will have to be bought
- 24 analytical objects which includes lines, channels, the Gann and Fibonacci, tools, shapes, and arrows
- These can be applied manually to charts as well as indicator windows
- 9 timeframes along with an unlimited number of charts
Conclusion
MetaTrader 4 has had countless reviews along with posts which are provided predominantly by traders and although these reviews may vary in opinion, the majority praise MT 4 as a trading platform.
Most brokers who are in operation today have MT 4 listed as a trading platform based not only on the good reputation that it has built since the launch, but because of its ease of access, ease of use and wide variety of functions and features.
MetaTrader 4 has a look and feel that is professional and it is available on a variety of devices, from desktop to mobile to ensure that traders can trade from anywhere in the world at any given time.
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