MetaTrader 4, also known as MT4, is a powerful trading platform that allows you to invest across a wide range of markets, including Forex, stocks, indices and even cryptocurrencies. We’ll explore how to use the MetaTrader 4 platform, including a step-by-step guide to getting started and much more.
What is MetaTrader 4?
MetaTrader 4 is a trading platform developed by MetaQuotes Software, a company founded back in 1996. The platform was released at the turn of the century and remains to this day, one of the most popular platforms amongst retail traders.
Managing investments across different platforms can be time-consuming and difficult to track. That’s why many investors look for platforms that can act as a one-stop shop. With MetaTrader 4, you can access a range of markets including Forex and CFDs on stocks, indices and commodities from a single platform. Some brokers even support CFDs on crypto-currencies.
Whilst some traditional brokers deliver delayed price feeds, or charge for live prices, MT4 streams live prices directly to the charts. The platform also makes it easy to place buy and sell orders directly from the charts. MT4’s functionality extends beyond that, to include advanced analysis tools, copy trading and automated trading.
Getting Started with MetaTrader 4
Before starting with MT4, you will need to select the best MetaTrader 4 broker for you, based on your trading preference and experience.
This can seem challenging at first, as over 750 brokers and financial institutions have made the platform available to their users. This wide range of options can easily lead to decision paralysis. If you’re in a hurry, you could turn to comparison websites that call out the best MT4 broker in the UK, USA and wherever you are.
Once you’ve reached your preferred broker’s website, create an account before downloading their MT4 platform. Most brokers will allow you to choose between either a demo account or a real-money account. The former comes with paper money, whereas the latter requires an initial deposit.
If you’re new to trading, we recommend that you open a demo account to practice before putting your hard-earned savings at risk on the financial markets. A demo account could appeal to seasoned traders too, looking to put new trading strategies to the test.
How To Use Charts in MetaTrader 4
Charts are everything when you’re a trader. You’ll like that MT4 allows you to open several charts at a time so that you can keep an eye on different markets in real time. For example, you could see how an interest rate decision by the Federal Reserve impacts both the US Dollar against world currencies and stock market indices.
MT4 supports a wide range of time intervals, stretching anywhere between 1-minute and to a 1-month. In practice, most traders use custom time frames like the 5-minute, hourly or daily charts to inform their trading decisions. Short time intervals are better suited to fast-moving markets, like foreign exchange and crypto-currencies.
Furthermore, MT4 charts support custom drawing tools. This makes it possible to plot support and resistance levels, as well as trendlines. We’ll touch on indicators a little later in this article. Beating the market is no easy feat, but it becomes easier once you’re equipped with the right tools.
How To Trade With MetaTrader 4
MT4 is known for its one-click trading system. This makes it easy to place an order directly from the charts. This could be either a buy order or a sell order, across any market that your MT4 broker supports.
MT4 supports a wide range of order types, including complex order types used for risk management purposes. These include market orders, limit orders, pending and stop orders as well as trailing stop orders that are typically used to lock-in profits and cap losses.
Once you’ve placed your first trade, you’ll eventually need to familiarize yourself with the platform’s order accounting modes:
- Netting mode: prevents you from opening more than one position in a symbol at any one time. This is the traditional netting system adopted on exchanges.
- Hedging Mode: places no restrictions whatsoever on the number of positions you can open in a symbol at any one time. You might ask yourself why you’d ever want to open a buy and a sell order in a given instrument at the same time. However, you’ll come to appreciate the benefits of hedging when you want to “lock-in” your unrealized profits (or losses) without closing your underlying position. This could be useful for tax purposes.
How to Use Automated Trading on MetaTrader 4
The MetaTrader 4 ows part of its appeal to trading bots. You could think of these as small computer programs that run inside the MetaTrader platform. Traders use these trading bots to analyze prices in real-time, calculate technical indicators and place buy and sell orders automatically, without human intervention.
If you have an interest in computer programming, you can write your own trading robots. However, if programming robots isn’t for you, you’ll find thousands of ready-made trading bots online. You can download most for free, and purchase or even rent them from the MetaTrader Market. Alternatively, you could hire a freelance programmer to write a custom script for you.
How To Set Up Indicators in MetaTrader 4
Traders use technical indicators to analyze prices, establish trends and help them predict future price changes. Popular indicators include moving averages, the Relative Strength Index (RSI), the MACD and Bollinger Bands.
As you’d expect, the MT4 platform comes with 30 built-in indicators that will meet most traders’ needs. Your broker may also provide custom indicators as a plugin when you create an account. You may download additional indicators free-of-charge, purchase or even rent them from third-party vendors from the MetaTrader Market.
Last but not least, you could write your own using the platform’s in-house programming language called MetaQuotes Language (MQL). MQL is an object-oriented language, similar to Java or C++.
Differences between MetaTrader 4 and 5
When searching for information about MetaTrader 4, you may come across articles mentioning its successor, MetaTrader 5. MT5 was released over 10 years ago and is only now gaining traction. However, it’s been slow to get an edge, so it’s fair to look into the main differences between both platforms.
MT5 supports a wider range of asset classes than MT4. Where MT4 only allows you to trade in the Forex and a small selection of CFD markets, MT5 supports CFDs on stocks, futures and options. However, not all brokers offer the same capabilities or range of markets. That’s why it’s important to take time to “shop around”, even when comparing the best MT4 brokers.
MT5 is also faster than MT4 because it can run multiple tasks at once, whereas MT4 can only process one task at a time. It does so by accessing faster processors and faster clock speeds on your computer. This will make a meaningful difference if you have an interest in trading bots.
However, MT4 trading bots aren’t compatible with MT5, because the latest version of the platform introduced a large number of breaking changes. If you’re new to the MetaTrader platform, you may want to keep an open mind between both versions. But if you’re a seasoned MT4 trader, it may be easier to stick with a platform you’re already comfortable with.