MetaTrader 4, also known as MT4 is a trading platform used by investors mainly for speculative online forex trading. Released in 2005 by MetaQuotes Software, the software is licensed by forex brokers that offer the platform to their clients. The software is the most advanced trading tool available online, consisting of a server and a client component. The server is run by the broker, while the client part is provided to the customers, who use it to monitor live prices of the assets, open positions, and manage their trading accounts.
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The main focus of the MetaTrader 4 platform is on margin trading and automation using custom programs called Expert Advisors. A wide range of forex brokers uses MT4 to offer CFD trading. However, the platform is not designed for full-time stock market or futures trading. On the MetaTrader 4 platform, investors have two types of trading orders:
- Pending Orders – trading orders will only be executed once the price reaches a predefined value
- Market Orders – the orders will be executed in one of the four modes available (Instant, Request, Market or Exchange)
MetaTrader 4 Execution Modes
To make things clear, we will explain how the four MT4 execution modes work in more detail.
- Instant execution allows traders to open the position at the price displayed on the platform. This execution mode offers traders the advantage of purchasing an asset at an acknowledged price. However, investors might miss out on trading opportunities if the volatility is high because there is a risk that the price can’t be served.
- Request execution offers traders the ability to execute a market order in two steps. First, they request a price quote and then the traders can decide whether they want to buy or sell the asset at the price they receive.
Traders have several seconds to decide if the received price is worth trading on or not. The advantage of request execution is that it combines price knowledge with guaranteed execution at the given price.
- Market execution enables investors to execute orders with a broker’s given price, even if it is different from the one displayed on the MetaTrader 4 platform. The main advantage of this model is that traders can invest without requotes. Still, the deviation can become substantial during volatile market periods.
- Exchange Execution is the mode in which the order is processed by an external execution facility, like an exchange. Essentially, the trade will be executed according to the ongoing depth of the market.
The MT4 package contains the following components:
- MetaTrader 4 Client Terminal – this tool is offered by forex brokers for real-time trading or as a Demo trading account. The MT4 software allows users to open trades, conduct technical analysis, and view charts. The client terminal comes with 50 default indicators included which can be customized according to the needs of the trader using the internal C-like programming language.
- MetaTrader 4 Server – this is the core of the MT4 platform and it was designed for handling user requests like executing trade operations and displaying warrants. Additionally, the server handles price quotes, news quotes, archives, and records.
- MetaTrader 4 Mobile – the mobile version of MetaTrader allows users to control their trading accounts directly from their mobile devices. The app is available on both iOS and Android devices and includes most of the key functions from the desktop version.
- MetaTrader 4 Manager – a tool designed for managing customer accounts and handling trade inquiries.
- MetaTrader 4 Data Center – represents the MT4 specialized proxy server which can act as an intermediary between the server and client terminal. The data center reduces the load time for the price quote sending on the main server.
MetaTrader 4 Step-By-Step Tutorial
Ready to set up a MetaTrader4 account? Here’s a quick guide on how to get started using the trading platform:
Create an MT4 account
- Navigate to the MetaTrader 4 official website and download the latest version
- Fill the account details
Record your account details
- Make sure you record and save a copy of the account login information before exiting the registration process
- MetaTrader4 offers users the ability to create and have control over multiple trading accounts without requiring them to exit the program.
We highly recommend you keep a close eye to the account you’re using before opening any trades and orders.
Learn to open trades
Now that the MetaTrader 4 account is all set, it’s time to discover how to open trades. We know that on the first try the platform’s interface might seem a bit intimidating. That is why we put together a short guide that will help you get started with MT4. Keep reading to discover how to open buy or sell positions via market execution and pending order and how to modify a trade after it’s been open.
How to enter a trade via Market Execution
- Click the New Order button from the Standard Toolbar
- From the drop-down list, choose a currency pair
- Now select Market Execution from the Order Type section
- Enter the amount you want to invest in that trade.
- Decide whether to BUY or SELL the currency pair that you’re trading
Bear in mind that the size of your position is expressed as volume and calculated in standard lot sizes(one standard lot = 100.000 units). For example, if you were to invest 15.000 units of a certain forex pair, you would have to input 0.15 in the volume field.
When you choose to buy or sell an fx pair, the stop loss and take profit features might be disabled. That’s because trading via market execution allows you to open a position as fast as possible when the price is already moving. Don’t worry, you will still be able to configure your exit levels after the trade has been entered.
How to enter a trade via Pending Order
- Click the New Order button
- Choose a currency pair from the drop-down list
- Select Pending Order from the Order Type section
- Decide if you want to BUY or SELL the pair from the drop-down list
Please note that when you buy or sell a currency pair via pending order, you will be presented with four options:
- Buy Limit – if you go for long at a lower level than the market price
- Sell Limit – for short trades at a level higher than then market price
- Buy Stop – going for long at a higher level than the market value
- Sell Stop – going for short at a level lower than the market value
- After the type of order has been selected, enter the price at which you’re willing to enter the market for that currency pair.
- Enter the amount you want to invest in the volume field.
- Decide what your stop loss and take profit will be
- If you want, you can set an expiry date for your order, which is a special feature of trading via Pending Order
- Once all fields have been filled in, tap the Place button to enter your trade and a dialogue box will confirm the execution of your order.
4. How to Modify Trades on MetaTrader4?
If you want to modify your trades on MT4, you will have to navigate to the Trade tab. This section will display your trade history, including position sizes, entry prices, stop losses, and profit targets. In case you don’t find the Trade tab, you don’t have to have to worry. Just navigate to the menu at the top of the window and select “View | Terminal (or use the shortcut CTRL+T on the keyboard). From the Trade section of the platform, you can add or modify the stop loss or take profit by following these steps:
- Right-click the trade you want to change and select “Modify or Delete Order”
- Fill in the Stop Loss and Take profit input fields with the desired values
- A dialogue box will pop out and confirm the execution of the adjustments made on your trade.
If you want to close a trade, you will need to:
- Right-click the trade you want to close and choose “Close Order”
- If you want to terminate the entire position, tap the yellow button located below the BUY and SELL options
- Once you hit close, your balance should be adjusted to the profit or loss made on the recently closed position.
Why choose MetaTrader 4?
The MetaTrader 4 Microsoft Windows-based application became popular because it offers end users the possibility to write their own robots and trading scripts that are used to automate the trading process. In 2010, MetaQuotes announced a new version of their platform, MetaTrader 5. However, the adoption of the new application was relatively slow, and in 2013, most online brokers were still using MT4, because clients were already familiarized with the interface.
Unfortunately, the platform has no official version available for the macOS operating system, but some brokers have developed custom MetaTrader 4 for Mac variants.
The client terminal has a built-in editor and compiler, which grants its users access to an open-source library of software, article, and other helpful resources. For tech-savvy investors, MetaTrader 4 uses a proprietary scripting language called MQL4, which allows users to develop their own Expert Advisors, scripts, and market indicators.
In fact, MetaTrader’s popularity is largely due to the platform’s support for algorithmic trading. Yahoo! Has a large group of over 12,000 developers that work on releasing free open source software for MetaTrader users, which allows anyone to join the action without spending any money.
At its core, MT4 was designed to be used as a stand-alone system where the broker could manually manage their position. Over the years, third party developers have created software bridges, which enabled integration with other investment systems. This way, trading platforms could benefit from the MetaTrader 4 automatic position hedging.
In 2012, MetaQuotes Software decided they weren’t too fond of this idea and started removing third-party plugins for MT4 from the web, suing, and warning brokers in the process.
The Bottom Line
MetaTrader 4 is a well-rounded trading platform designed for intermediate and advanced investors. Combining the tools and Expert Advisors available in MT4 with technical analysis knowledge will improve your trading decisions and build a well-rounded portfolio. If you’re a beginner, however, we recommend going for a broker that has an in-house forex trading platform. That’s because they have a seamless user interface which will help you get accommodated with more complex trading software in the future.