A Beginner’s Guide to Using MT4 and MT5 Forex Broker
People are always on the lookout for new and effective ways of earning money. Luckily, the integration of the internet and technology paved the way for the innovation of Metatrader.
What is Metatrader?
Metatrader is a software that bridges various trading platforms and provides you an opportunity to trade and access it with your smartphone or computer. With the help of Metatrader, you can access any trading platforms with ease and convenience.
In a nutshell, Metatrader is the most reliable software utilized by Forex traders. Why? The main reason for such preferences is the freedom of choice traders have regarding its brokers just as long as it’s compatible with the Forex trading platform.
Whenever cases of incompatibility arise, you have Metatrader to bridge these differences and you’re good to trade. As of this moment, there are two available versions of Metatrader. You can choose from MT4 and MT5. Both these Metatrader versions are created by a Russian organization called MetaQuotes Software Corporation. Its popularity and quality make Metatrader a leader in the financial software industry.
Why Choose Metatrader?
One of the greatest things that Metatrader boasts is its software size. It’s a lightweight software that you can directly install on Metatrader’s site, where trading functions can be performed accurately and fast. Plus, when you perform trades on a timely basis, you have a great advantage in a volatile market.
Metatrader also supports the configuration of trading processes such as market, stop loss, trailing and pending stop orders to optimize trading and to maximize earnings.
The Metatrader also allows the use of Expert Advisors (EA) that function on autopilot. How does it work? While you’re busy or unable to access the software at a given time, EAs can trade for you by assessing the best investment strategies and applying it to your investment choices.
Metatrader provides you a comprehensive list of transactions from the EA functions to assess whether the movements of your investments of trade instruments are optimal and utilize this information for future transactions.
If you are a Forex trader, you can take advantage of Metatrader because of the market fluctuations reflecting in the software. With objective and quantitative speculations, you can take action by opening up accurate oppositions.
Furthermore, Metatrader’s two versions, MT4 and MT5, are ideal for trading indexes, bonds, stocks, commodities, metals, or other financial derivatives like futures, contracts for differences, and options.
As we go down the nitty-gritty on both versions of Metatrader, we’ll delve into the details of Metatrader 4 first.
Forex users have been using MT4 for a lot of reasons. First of all, it’s the most popular e-commerce platform that has never failed Forex users for over ten years from now. As described by the majority of its users, this Forex trading platform features security, mobility, and other useful functions that traders use, day in and out.
Metatrader 4 utilizes the MetaQuotes Language (MQL). This language contains a series of commands that are embedded in the software that applies and facilitates automatic trading, exchange strategies, and lastly, analyze market fluctuations and other information needed by the user.
With Metatrader 4, you as a trader can enjoy the following functions.
● The software has incorporated indicators that you can customize. This is made possible with the integration of MetaEditor on its software. Although the platform already has 30 indicators that you can use, you have the choice of adding, removing or editing some indicators that a trader can utilize for monitoring the market situation and acting accordingly to your advantage.
● As we mentioned earlier, the MT4 has Expert Advisors (EA) that you can activate on autopilot. These Expert Advisors (EA) can also be referred to as commercial robots. They analyze information on a current market situation (we’re talking real-time analysis) and make objective negotiations over a planned occurrence. The help of these EAs makes it possible for you to create applications, utilize them for your tradings, upload it to a code library or sell it to the community or the MetaTrader market.
● Speaking of a code library, this is the place where you can upload custom functions, trading blocks and more. Plus, you can retrieve the uploaded codes and use them for your own transactions.
● Another crucial aspect that handles your trading operations scripts. These scripts handle operations at the beginning of a trade or an event. But the downside that you need to understand is that scripts do not allow simultaneous operations.
As a round-up, the MetaTrader 4 uses the MQL4 as its programming language. It can handle 3 orders at the same time. On the other hand, it is capable to handle 4 pending orders. Navigation in the software and intuitive use makes it the most user-friendly trading platform. It has 33 analytical tools, no economic calendar installed, but its availability to brokers is very high.
It’s already 2020 and the MetaQuotes Software Corporation decided to introduce the Metatrader 5 in 2010. After 5 years of Metatrader 4’s popularity, the common misconception traders have is that Metatrader 5 is the newer version of Metatrader 4 when in reality, it’s not. There are limitations that Metatrader 4 have and the solution or the answer for such is the development of Metatrader 5.
For starters, Metatrader 5 lets you trade in other markets aside from Forex. If you try to analyze the structure of Forex, it follows a decentralized trading exchange. What’s more is that MT5 complies with the USA’s no hedging regulation. Users or clients of Forex brokers must first close the first trade then move onto another.
Metatrader 4 records transactions individually and manages each separately. Meanwhile, the Metatrader 5 aggregates all transactions. This process makes Metatrader 5 unsusceptible with hedging. As a final note, the Metatrader 5 was developed to attract users to trade in non-Forex markets and satisfy the trading needs which Metatrader 4 can’t provide.
In comparison to the MT4, MT5 has the following features.
● The MT5 utilizes the MLQ5 programming language. Such advancement lets you enjoy “black box” programming. What does this mean? The “black box” programming signifies that you can tailor trading operations easier and with a better logical framework. More so, such improvement is useful for Expert Advisors and trading robots making optimal trading choices for you.
● Users that will transition from MT4 to MT5 may be disappointed with the no backward compatibility of this change. If you want to upgrade because you initially thought that MT5 is the newer version of MT4, you can’t make such a thing happen. Whenever you have a program written in MT4, you will discover that you can’t execute the program in the MT5 platform.
● As an advantage, there are two powerful programming-related keys that MT5 outshone MT4 with. First, your customized trading strategies run at a faster speed. This particular advantage helps traders that run a large number of backtests. Second, multi-currency pair backtesting is optimized with the MT5.
Of course, it may cause confusion for traders everywhere which trading platform to use. However, it all depends on what you need for a trading process. If you’re a beginner, going with the MT4 can help you best. If you want to explore the complexities of trading, MT5 may suit you better.
Utilizing MT4 as a Beginner
After careful considerations, you came to the conclusion that you need to understand the fundamentals first. You go with the choice of using MT4 as your trading platform. Listed below are the steps you can follow on an easy MT4 setup for Forex.
1. Download MT4 on your preferred device
Whether you plan to trade on a Windows PC, MacBook, Android smartphone or in an IOs device, there’s an MT4 platform for all. You can key in a simple MT4 platform download in a search engine and choose which one’s suited for your device.
2. Signing In on MT4
Once you have finished downloading the executable file of MT4 on your device, open it. A prompt for your account details may show. If not, you can simply click on the “File” button and choose “Login to Trade Account” and enter either your demo trading account or full trading account.
3. Trade Currency Pair
With the “Order” window open, you can quickly place your order. Click on the “Window” tab, select a currency pair, then choose “New Window.” If you want to trade on a market offer/bid, enter your trade size number (otherwise known as lots) and choose buy or sell. Don’t forget to click “Market Execution” as the order type.
4. Entering a Short Position
When you don’t have a long position to trade, you have the choice of going short or do short selling. To do this, place a sell trade that is open and you’re done!
5. Closing the Trade
After you have opened a trade, there will come a time where you need to close this trade. To do this, choose the “Trade” from your MT4’s terminal window). This step displays the open trades you currently have, then right-click on your chosen trade and select close.
6. Stop-loss in Your Trade
Once you get the hang out of the MT4 platform, you’ll see fields that you can open from an “Order” window. You can set a “stop loss” level or a “take profit” level. By tinkering with the arrows (levels), you can see how the stop loss level correlates with offer prices and current bids.
7. Place a Limit Order
On the “take profit” field previously mentioned, enter a desired target price. Furthermore, you can limit the order in an open position. Change the “type” field from “market execution” to “pending order.” There’s a drop-down menu where you can choose ”sell limit” or “buy limit.”
8. Change Volume of a Trade
The Metatrader 4 signifies the volume of a trade as the number of slots. Once you open a trade, there’s a field that indicates the “volume” field. You can specify the number here. As a final word, there are a lot of things you can do with MT4. The possibilities are endless! As long as you’re into trading, trust that MT4 will be your reliable guide and instrument to trading success. Of course, the ones listed above are only the tip of the iceberg when setting up your MT4 for Forex trading. The best thing you can do is dive into the software, learn from usage and experience, and apply it to your optimal trading strategies. If you’re afraid that you might lose money in the middle of experimentation, you can go ahead and try the demo trade.
The demo trading account allows you to experience trading in MT4 real-time and the same as the pros do it, but you don’t have to fear losing precious money. Once you get the hang out of all the nitty-gritty and you’re confident about your knowledge and familiarity with this tool, trade with your full account.